Correlation Between Chia Chang and Kinko Optical
Can any of the company-specific risk be diversified away by investing in both Chia Chang and Kinko Optical 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 Kinko Optical 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 Kinko Optical Co, you can compare the effects of market volatilities on Chia Chang and Kinko Optical 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 Kinko Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and Kinko Optical.
Diversification Opportunities for Chia Chang and Kinko Optical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chia and Kinko is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and Kinko Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinko Optical 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 Kinko Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinko Optical has no effect on the direction of Chia Chang i.e., Chia Chang and Kinko Optical go up and down completely randomly.
Pair Corralation between Chia Chang and Kinko Optical
Assuming the 90 days trading horizon Chia Chang is expected to generate 14.53 times less return on investment than Kinko Optical. But when comparing it to its historical volatility, Chia Chang Co is 4.89 times less risky than Kinko Optical. It trades about 0.02 of its potential returns per unit of risk. Kinko Optical Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,860 in Kinko Optical Co on December 29, 2024 and sell it today you would earn a total of 235.00 from holding Kinko Optical Co or generate 8.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.25% |
Values | Daily Returns |
Chia Chang Co vs. Kinko Optical Co
Performance |
Timeline |
Chia Chang |
Kinko Optical |
Chia Chang and Kinko Optical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chia Chang and Kinko Optical
The main advantage of trading using opposite Chia Chang and Kinko Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang position performs unexpectedly, Kinko Optical 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 Kinko Optical will offset losses from the drop in Kinko Optical'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 |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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