Correlation Between Chia Chang and Far EasTone
Can any of the company-specific risk be diversified away by investing in both Chia Chang and Far EasTone 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 Chang and Far EasTone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Chang Co and Far EasTone Telecommunications, you can compare the effects of market volatilities on Chia Chang and Far EasTone 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 Chang with a short position of Far EasTone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and Far EasTone.
Diversification Opportunities for Chia Chang and Far EasTone
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chia and Far is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and Far EasTone Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far EasTone Telecomm and Chia Chang 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 Chang Co are associated (or correlated) with Far EasTone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far EasTone Telecomm has no effect on the direction of Chia Chang i.e., Chia Chang and Far EasTone go up and down completely randomly.
Pair Corralation between Chia Chang and Far EasTone
Assuming the 90 days trading horizon Chia Chang is expected to generate 3.99 times less return on investment than Far EasTone. But when comparing it to its historical volatility, Chia Chang Co is 1.18 times less risky than Far EasTone. It trades about 0.02 of its potential returns per unit of risk. Far EasTone Telecommunications is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,880 in Far EasTone Telecommunications on December 4, 2024 and sell it today you would earn a total of 250.00 from holding Far EasTone Telecommunications or generate 2.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.21% |
Values | Daily Returns |
Chia Chang Co vs. Far EasTone Telecommunications
Performance |
Timeline |
Chia Chang |
Far EasTone Telecomm |
Chia Chang and Far EasTone Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chia Chang and Far EasTone
The main advantage of trading using opposite Chia Chang and Far EasTone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang position performs unexpectedly, Far EasTone 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 Far EasTone will offset losses from the drop in Far EasTone's long position.Chia Chang vs. FSP Technology | Chia Chang vs. HannStar Board Corp | Chia Chang vs. Taiwan Surface Mounting | Chia Chang vs. Emerging Display Technologies |
Far EasTone vs. Taiwan Mobile Co | Far EasTone vs. Chunghwa Telecom Co | Far EasTone vs. President Chain Store | Far EasTone vs. Formosa Petrochemical 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |