Correlation Between Onano Industrial and Chi Hua

Can any of the company-specific risk be diversified away by investing in both Onano Industrial and Chi Hua 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 Onano Industrial and Chi Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Onano Industrial Corp and Chi Hua Fitness, you can compare the effects of market volatilities on Onano Industrial and Chi Hua 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 Onano Industrial with a short position of Chi Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onano Industrial and Chi Hua.

Diversification Opportunities for Onano Industrial and Chi Hua

-0.21

Correlation Coefficient

Onano Industrial  Chi Hua

Very good diversification

The 3 months correlation between Onano and Chi is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Onano Industrial Corp and Chi Hua Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Hua Fitness and Onano Industrial 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 Onano Industrial Corp are associated (or correlated) with Chi Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Hua Fitness has no effect on the direction of Onano Industrial i.e., Onano Industrial and Chi Hua go up and down completely randomly.

Pair Corralation between Onano Industrial and Chi Hua

Assuming the 90 days trading horizon Onano Industrial Corp is expected to generate 3.14 times more return on investment than Chi Hua. However, Onano Industrial is 3.14 times more volatile than Chi Hua Fitness. It trades about 0.02 of its potential returns per unit of risk. Chi Hua Fitness is currently generating about -0.08 per unit of risk. If you would invest  3,480  in Onano Industrial Corp on September 15, 2024 and sell it today you would lose (20.00) from holding Onano Industrial Corp or give up 0.57% of portfolio value over 90 days.

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

Onano Industrial Corp  vs.  Chi Hua Fitness

Onano Industrial Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Onano Industrial Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Onano Industrial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Chi Hua Fitness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chi Hua Fitness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Onano Industrial and Chi Hua

The main advantage of trading using opposite Onano Industrial and Chi Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onano Industrial position performs unexpectedly, Chi Hua 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 Chi Hua will offset losses from the drop in Chi Hua's long position.

The idea behind Onano Industrial Corp and Chi Hua Fitness 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 Stocks Directory module to find actively traded stocks across global markets.