Correlation Between Cheng Shin and Gordon Auto

Can any of the company-specific risk be diversified away by investing in both Cheng Shin and Gordon Auto 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 Cheng Shin and Gordon Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cheng Shin Rubber and Gordon Auto Body, you can compare the effects of market volatilities on Cheng Shin and Gordon Auto 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 Cheng Shin with a short position of Gordon Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Shin and Gordon Auto.

Diversification Opportunities for Cheng Shin and Gordon Auto

0.0

Correlation Coefficient

Cheng Shin  Gordon Auto

Pay attention - limited upside

The 3 months correlation between Cheng and Gordon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Shin Rubber and Gordon Auto Body in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gordon Auto Body and Cheng Shin 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 Cheng Shin Rubber are associated (or correlated) with Gordon Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gordon Auto Body has no effect on the direction of Cheng Shin i.e., Cheng Shin and Gordon Auto go up and down completely randomly.

Pair Corralation between Cheng Shin and Gordon Auto

If you would invest (100.00) in Gordon Auto Body on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Gordon Auto Body or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cheng Shin Rubber  vs.  Gordon Auto Body

Cheng Shin Rubber

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cheng Shin Rubber has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Cheng Shin is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gordon Auto Body

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gordon Auto Body are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Gordon Auto may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cheng Shin and Gordon Auto

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

The idea behind Cheng Shin Rubber and Gordon Auto Body 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..