Correlation Between Taisun Enterprise and Chlitina Holding

Can any of the company-specific risk be diversified away by investing in both Taisun Enterprise and Chlitina Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Taisun Enterprise and Chlitina Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Taisun Enterprise Co and Chlitina Holding, you can compare the effects of market volatilities on Taisun Enterprise and Chlitina Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Taisun Enterprise with a short position of Chlitina Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taisun Enterprise and Chlitina Holding.

Diversification Opportunities for Taisun Enterprise and Chlitina Holding

-0.36

Correlation Coefficient

Taisun Enterprise  Chlitina Holding

Very good diversification

The 3 months correlation between Taisun and Chlitina is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Taisun Enterprise Co and Chlitina Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chlitina Holding and Taisun Enterprise is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Taisun Enterprise Co are associated (or correlated) with Chlitina Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chlitina Holding has no effect on the direction of Taisun Enterprise i.e., Taisun Enterprise and Chlitina Holding go up and down completely randomly.

Pair Corralation between Taisun Enterprise and Chlitina Holding

Assuming the 90 days trading horizon Taisun Enterprise Co is expected to generate 0.82 times more return on investment than Chlitina Holding. However, Taisun Enterprise Co is 1.22 times less risky than Chlitina Holding. It trades about -0.03 of its potential returns per unit of risk. Chlitina Holding is currently generating about -0.15 per unit of risk. If you would invest  2,250  in Taisun Enterprise Co on September 24, 2024 and sell it today you would lose (275.00) from holding Taisun Enterprise Co or give up 12.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Taisun Enterprise Co  vs.  Chlitina Holding

Taisun Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taisun Enterprise Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Taisun Enterprise is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Chlitina Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chlitina Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Taisun Enterprise and Chlitina Holding

The main advantage of trading using opposite Taisun Enterprise and Chlitina Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taisun Enterprise position performs unexpectedly, Chlitina Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chlitina Holding will offset losses from the drop in Chlitina Holding's long position.

The idea behind Taisun Enterprise Co and Chlitina Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.