Correlation Between Chi Hua and RiTdisplay Corp

Can any of the company-specific risk be diversified away by investing in both Chi Hua and RiTdisplay 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 RiTdisplay 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 RiTdisplay Corp, you can compare the effects of market volatilities on Chi Hua and RiTdisplay 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 RiTdisplay Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Hua and RiTdisplay Corp.

Diversification Opportunities for Chi Hua and RiTdisplay Corp

-0.53

Correlation Coefficient

Chi Hua  RiTdisplay Corp

Excellent diversification

The 3 months correlation between Chi and RiTdisplay is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chi Hua Fitness and RiTdisplay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiTdisplay 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 RiTdisplay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiTdisplay Corp has no effect on the direction of Chi Hua i.e., Chi Hua and RiTdisplay Corp go up and down completely randomly.

Pair Corralation between Chi Hua and RiTdisplay Corp

Assuming the 90 days trading horizon Chi Hua Fitness is expected to under-perform the RiTdisplay Corp. But the stock apears to be less risky and, when comparing its historical volatility, Chi Hua Fitness is 2.48 times less risky than RiTdisplay Corp. The stock trades about -0.08 of its potential returns per unit of risk. The RiTdisplay Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,400  in RiTdisplay Corp on September 16, 2024 and sell it today you would earn a total of  345.00  from holding RiTdisplay Corp or generate 7.84% return on investment over 90 days.

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

Chi Hua Fitness  vs.  RiTdisplay Corp

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.

RiTdisplay Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RiTdisplay Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, RiTdisplay Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Chi Hua and RiTdisplay Corp

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

The idea behind Chi Hua Fitness and RiTdisplay Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.