Correlation Between Chi Hua and Phytohealth Corp
Can any of the company-specific risk be diversified away by investing in both Chi Hua and Phytohealth Corp 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 Hua and Phytohealth Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chi Hua Fitness and Phytohealth Corp, you can compare the effects of market volatilities on Chi Hua and Phytohealth Corp 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 Hua with a short position of Phytohealth Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Hua and Phytohealth Corp.
Diversification Opportunities for Chi Hua and Phytohealth Corp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chi and Phytohealth is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Chi Hua Fitness and Phytohealth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phytohealth Corp and Chi Hua 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 Hua Fitness are associated (or correlated) with Phytohealth Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phytohealth Corp has no effect on the direction of Chi Hua i.e., Chi Hua and Phytohealth Corp go up and down completely randomly.
Pair Corralation between Chi Hua and Phytohealth Corp
Assuming the 90 days trading horizon Chi Hua Fitness is expected to under-perform the Phytohealth Corp. But the stock apears to be less risky and, when comparing its historical volatility, Chi Hua Fitness is 1.03 times less risky than Phytohealth Corp. The stock trades about -0.09 of its potential returns per unit of risk. The Phytohealth Corp is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 2,170 in Phytohealth Corp on September 24, 2024 and sell it today you would lose (590.00) from holding Phytohealth Corp or give up 27.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chi Hua Fitness vs. Phytohealth Corp
Performance |
Timeline |
Chi Hua Fitness |
Phytohealth Corp |
Chi Hua and Phytohealth Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chi Hua and Phytohealth Corp
The main advantage of trading using opposite Chi Hua and Phytohealth Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Hua position performs unexpectedly, Phytohealth Corp 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 Phytohealth Corp will offset losses from the drop in Phytohealth Corp's long position.Chi Hua vs. Feng Tay Enterprises | Chi Hua vs. Pou Chen Corp | Chi Hua vs. Fulgent Sun International | Chi Hua vs. Advanced Energy Solution |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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