Correlation Between Hi Clearance and Chicony Power

Can any of the company-specific risk be diversified away by investing in both Hi Clearance and Chicony Power 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 Hi Clearance and Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hi Clearance and Chicony Power Technology, you can compare the effects of market volatilities on Hi Clearance and Chicony Power 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 Hi Clearance with a short position of Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Clearance and Chicony Power.

Diversification Opportunities for Hi Clearance and Chicony Power

0.39

Correlation Coefficient

Hi Clearance  Chicony Power

Weak diversification

The 3 months correlation between 1788 and Chicony is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hi Clearance and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology and Hi Clearance 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 Hi Clearance are associated (or correlated) with Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of Hi Clearance i.e., Hi Clearance and Chicony Power go up and down completely randomly.

Pair Corralation between Hi Clearance and Chicony Power

Assuming the 90 days trading horizon Hi Clearance is expected to generate 0.24 times more return on investment than Chicony Power. However, Hi Clearance is 4.11 times less risky than Chicony Power. It trades about 0.17 of its potential returns per unit of risk. Chicony Power Technology is currently generating about 0.03 per unit of risk. If you would invest  13,900  in Hi Clearance on December 22, 2024 and sell it today you would earn a total of  500.00  from holding Hi Clearance or generate 3.6% return on investment over 90 days.

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

Hi Clearance  vs.  Chicony Power Technology

Hi Clearance

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hi Clearance are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hi Clearance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Chicony Power Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chicony Power Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Chicony Power is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Hi Clearance and Chicony Power

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

The idea behind Hi Clearance and Chicony Power Technology 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.