Correlation Between Chia Yi and Kworld Computer
Can any of the company-specific risk be diversified away by investing in both Chia Yi and Kworld Computer 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 Chia Yi and Kworld Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Yi Steel and Kworld Computer Co, you can compare the effects of market volatilities on Chia Yi and Kworld Computer 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 Chia Yi with a short position of Kworld Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Yi and Kworld Computer.
Diversification Opportunities for Chia Yi and Kworld Computer
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chia and Kworld is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Chia Yi Steel and Kworld Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kworld Computer and Chia Yi 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 Chia Yi Steel are associated (or correlated) with Kworld Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kworld Computer has no effect on the direction of Chia Yi i.e., Chia Yi and Kworld Computer go up and down completely randomly.
Pair Corralation between Chia Yi and Kworld Computer
Assuming the 90 days trading horizon Chia Yi Steel is expected to generate 1.12 times more return on investment than Kworld Computer. However, Chia Yi is 1.12 times more volatile than Kworld Computer Co. It trades about -0.04 of its potential returns per unit of risk. Kworld Computer Co is currently generating about -0.09 per unit of risk. If you would invest 1,100 in Chia Yi Steel on December 5, 2024 and sell it today you would lose (65.00) from holding Chia Yi Steel or give up 5.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chia Yi Steel vs. Kworld Computer Co
Performance |
Timeline |
Chia Yi Steel |
Kworld Computer |
Chia Yi and Kworld Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chia Yi and Kworld Computer
The main advantage of trading using opposite Chia Yi and Kworld Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Yi position performs unexpectedly, Kworld Computer 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 Kworld Computer will offset losses from the drop in Kworld Computer's long position.Chia Yi vs. Bright Led Electronics | Chia Yi vs. Advanced Wireless Semiconductor | Chia Yi vs. Loop Telecommunication International | Chia Yi vs. WinMate Communication INC |
Kworld Computer vs. Datavan International | Kworld Computer vs. Phoenix Silicon International | Kworld Computer vs. Yung Zip Chemical | Kworld Computer vs. K Way Information |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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