Correlation Between Chi Sheng and C Tech
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and C Tech 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 Chi Sheng and C Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chi Sheng Chemical and C Tech United, you can compare the effects of market volatilities on Chi Sheng and C Tech 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 Chi Sheng with a short position of C Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and C Tech.
Diversification Opportunities for Chi Sheng and C Tech
Very poor diversification
The 3 months correlation between Chi and 3625 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and C Tech United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Tech United and Chi Sheng 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 Chi Sheng Chemical are associated (or correlated) with C Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Tech United has no effect on the direction of Chi Sheng i.e., Chi Sheng and C Tech go up and down completely randomly.
Pair Corralation between Chi Sheng and C Tech
Assuming the 90 days trading horizon Chi Sheng is expected to generate 10.14 times less return on investment than C Tech. But when comparing it to its historical volatility, Chi Sheng Chemical is 6.83 times less risky than C Tech. It trades about 0.17 of its potential returns per unit of risk. C Tech United is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,215 in C Tech United on September 6, 2024 and sell it today you would earn a total of 930.00 from holding C Tech United or generate 76.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Chi Sheng Chemical vs. C Tech United
Performance |
Timeline |
Chi Sheng Chemical |
C Tech United |
Chi Sheng and C Tech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chi Sheng and C Tech
The main advantage of trading using opposite Chi Sheng and C Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, C Tech 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 C Tech will offset losses from the drop in C Tech's long position.Chi Sheng vs. Voltronic Power Technology | Chi Sheng vs. Highlight Tech | Chi Sheng vs. Standard Foods Corp | Chi Sheng vs. Arbor Technology |
C Tech vs. Dadi Early Childhood Education | C Tech vs. GameSparcs Co | C Tech vs. Taiwan Speciality Chemicals | C Tech vs. Mechema Chemicals Int |
Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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