Correlation Between Chaheng Precision and Lotes
Can any of the company-specific risk be diversified away by investing in both Chaheng Precision and Lotes 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 Chaheng Precision and Lotes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chaheng Precision Co and Lotes Co, you can compare the effects of market volatilities on Chaheng Precision and Lotes 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 Chaheng Precision with a short position of Lotes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaheng Precision and Lotes.
Diversification Opportunities for Chaheng Precision and Lotes
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chaheng and Lotes is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chaheng Precision Co and Lotes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotes and Chaheng Precision 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 Chaheng Precision Co are associated (or correlated) with Lotes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotes has no effect on the direction of Chaheng Precision i.e., Chaheng Precision and Lotes go up and down completely randomly.
Pair Corralation between Chaheng Precision and Lotes
Assuming the 90 days trading horizon Chaheng Precision is expected to generate 4.81 times less return on investment than Lotes. But when comparing it to its historical volatility, Chaheng Precision Co is 1.56 times less risky than Lotes. It trades about 0.02 of its potential returns per unit of risk. Lotes Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 158,500 in Lotes Co on September 25, 2024 and sell it today you would earn a total of 34,000 from holding Lotes Co or generate 21.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Chaheng Precision Co vs. Lotes Co
Performance |
Timeline |
Chaheng Precision |
Lotes |
Chaheng Precision and Lotes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chaheng Precision and Lotes
The main advantage of trading using opposite Chaheng Precision and Lotes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaheng Precision position performs unexpectedly, Lotes 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 Lotes will offset losses from the drop in Lotes' long position.Chaheng Precision vs. CSBC Corp Taiwan | Chaheng Precision vs. Eva Airways Corp | Chaheng Precision vs. Taiwan High Speed | Chaheng Precision vs. China Airlines |
Lotes vs. Century Wind Power | Lotes vs. Green World Fintech | Lotes vs. Ingentec | Lotes vs. Chaheng Precision Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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