Correlation Between CHC Healthcare and Chunghwa Chemical
Can any of the company-specific risk be diversified away by investing in both CHC Healthcare and Chunghwa 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 CHC Healthcare and Chunghwa Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHC Healthcare Group and Chunghwa Chemical Synthesis, you can compare the effects of market volatilities on CHC Healthcare and Chunghwa 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 CHC Healthcare with a short position of Chunghwa Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHC Healthcare and Chunghwa Chemical.
Diversification Opportunities for CHC Healthcare and Chunghwa Chemical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHC and Chunghwa is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CHC Healthcare Group and Chunghwa Chemical Synthesis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Chemical and CHC Healthcare 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 CHC Healthcare Group are associated (or correlated) with Chunghwa Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Chemical has no effect on the direction of CHC Healthcare i.e., CHC Healthcare and Chunghwa Chemical go up and down completely randomly.
Pair Corralation between CHC Healthcare and Chunghwa Chemical
Assuming the 90 days trading horizon CHC Healthcare Group is expected to generate 0.9 times more return on investment than Chunghwa Chemical. However, CHC Healthcare Group is 1.11 times less risky than Chunghwa Chemical. It trades about 0.0 of its potential returns per unit of risk. Chunghwa Chemical Synthesis is currently generating about -0.5 per unit of risk. If you would invest 4,100 in CHC Healthcare Group on September 26, 2024 and sell it today you would lose (10.00) from holding CHC Healthcare Group or give up 0.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CHC Healthcare Group vs. Chunghwa Chemical Synthesis
Performance |
Timeline |
CHC Healthcare Group |
Chunghwa Chemical |
CHC Healthcare and Chunghwa Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHC Healthcare and Chunghwa Chemical
The main advantage of trading using opposite CHC Healthcare and Chunghwa Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHC Healthcare position performs unexpectedly, Chunghwa 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 Chunghwa Chemical will offset losses from the drop in Chunghwa Chemical's long position.CHC Healthcare vs. Phytohealth Corp | CHC Healthcare vs. GenMont Biotech | CHC Healthcare vs. Hung Sheng Construction | CHC Healthcare vs. De Licacy Industrial |
Chunghwa Chemical vs. CHC Healthcare Group | Chunghwa Chemical vs. GenMont Biotech | Chunghwa Chemical vs. Sinphar Pharmaceutical Co | Chunghwa Chemical vs. Abnova Taiwan Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |