Correlation Between Chi Sheng and Johnson Chemical
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Johnson Chemical 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 Sheng and Johnson Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chi Sheng Chemical and Johnson Chemical Pharmaceutical, you can compare the effects of market volatilities on Chi Sheng and Johnson Chemical 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 Sheng with a short position of Johnson Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Johnson Chemical.
Diversification Opportunities for Chi Sheng and Johnson Chemical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chi and Johnson is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Johnson Chemical Pharmaceutica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Chemical Pha and Chi Sheng 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 Sheng Chemical are associated (or correlated) with Johnson Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Chemical Pha has no effect on the direction of Chi Sheng i.e., Chi Sheng and Johnson Chemical go up and down completely randomly.
Pair Corralation between Chi Sheng and Johnson Chemical
Assuming the 90 days trading horizon Chi Sheng Chemical is expected to generate 0.62 times more return on investment than Johnson Chemical. However, Chi Sheng Chemical is 1.61 times less risky than Johnson Chemical. It trades about 0.12 of its potential returns per unit of risk. Johnson Chemical Pharmaceutical is currently generating about 0.05 per unit of risk. If you would invest 2,805 in Chi Sheng Chemical on December 30, 2024 and sell it today you would earn a total of 230.00 from holding Chi Sheng Chemical or generate 8.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chi Sheng Chemical vs. Johnson Chemical Pharmaceutica
Performance |
Timeline |
Chi Sheng Chemical |
Johnson Chemical Pha |
Chi Sheng and Johnson Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chi Sheng and Johnson Chemical
The main advantage of trading using opposite Chi Sheng and Johnson Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Johnson Chemical 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 Johnson Chemical will offset losses from the drop in Johnson Chemical's long position.Chi Sheng vs. Tigerair Taiwan Co | Chi Sheng vs. Transcend Information | Chi Sheng vs. K Way Information | Chi Sheng vs. International Games System |
Johnson Chemical vs. Sesoda Corp | Johnson Chemical vs. Genovate Biotechnology Co | Johnson Chemical vs. Apex Biotechnology Corp | Johnson Chemical vs. Grand Ocean Retail |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |