Correlation Between Chung Hung and ECloudvalley Digital

Can any of the company-specific risk be diversified away by investing in both Chung Hung and ECloudvalley Digital 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 Hung and ECloudvalley Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chung Hung Steel and eCloudvalley Digital Technology, you can compare the effects of market volatilities on Chung Hung and ECloudvalley Digital 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 Hung with a short position of ECloudvalley Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hung and ECloudvalley Digital.

Diversification Opportunities for Chung Hung and ECloudvalley Digital

-0.59

Correlation Coefficient

Chung Hung  ECloudvalley Digital

Excellent diversification

The 3 months correlation between Chung and ECloudvalley is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hung Steel and eCloudvalley Digital Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eCloudvalley Digital and Chung Hung 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 Hung Steel are associated (or correlated) with ECloudvalley Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eCloudvalley Digital has no effect on the direction of Chung Hung i.e., Chung Hung and ECloudvalley Digital go up and down completely randomly.

Pair Corralation between Chung Hung and ECloudvalley Digital

Assuming the 90 days trading horizon Chung Hung Steel is expected to generate 1.08 times more return on investment than ECloudvalley Digital. However, Chung Hung is 1.08 times more volatile than eCloudvalley Digital Technology. It trades about 0.13 of its potential returns per unit of risk. eCloudvalley Digital Technology is currently generating about -0.07 per unit of risk. If you would invest  1,815  in Chung Hung Steel on December 25, 2024 and sell it today you would earn a total of  400.00  from holding Chung Hung Steel or generate 22.04% return on investment over 90 days.

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

Chung Hung Steel  vs.  eCloudvalley Digital Technolog

Chung Hung Steel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chung Hung Steel are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chung Hung showed solid returns over the last few months and may actually be approaching a breakup point.

eCloudvalley Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days eCloudvalley Digital Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Chung Hung and ECloudvalley Digital

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

The idea behind Chung Hung Steel and eCloudvalley Digital 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 Commodity Directory module to find actively traded commodities issued by global exchanges.