Correlation Between Chung Fu and Swancor Holding
Can any of the company-specific risk be diversified away by investing in both Chung Fu and Swancor 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 Chung Fu and Swancor Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Fu Tex International and Swancor Holding Co, you can compare the effects of market volatilities on Chung Fu and Swancor 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 Chung Fu with a short position of Swancor Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Fu and Swancor Holding.
Diversification Opportunities for Chung Fu and Swancor Holding
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chung and Swancor is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chung Fu Tex International and Swancor Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swancor Holding and Chung Fu 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 Chung Fu Tex International are associated (or correlated) with Swancor Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swancor Holding has no effect on the direction of Chung Fu i.e., Chung Fu and Swancor Holding go up and down completely randomly.
Pair Corralation between Chung Fu and Swancor Holding
Assuming the 90 days trading horizon Chung Fu Tex International is expected to generate 2.06 times more return on investment than Swancor Holding. However, Chung Fu is 2.06 times more volatile than Swancor Holding Co. It trades about 0.14 of its potential returns per unit of risk. Swancor Holding Co is currently generating about -0.11 per unit of risk. If you would invest 3,300 in Chung Fu Tex International on December 30, 2024 and sell it today you would earn a total of 940.00 from holding Chung Fu Tex International or generate 28.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Chung Fu Tex International vs. Swancor Holding Co
Performance |
Timeline |
Chung Fu Tex |
Swancor Holding |
Chung Fu and Swancor Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chung Fu and Swancor Holding
The main advantage of trading using opposite Chung Fu and Swancor Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Fu position performs unexpectedly, Swancor 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 Swancor Holding will offset losses from the drop in Swancor Holding's long position.Chung Fu vs. AVer Information | Chung Fu vs. Newretail Co | Chung Fu vs. Tait Marketing Distribution | Chung Fu vs. Evergreen International Storage |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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