Correlation Between Sysgration and Chialin Precision

Can any of the company-specific risk be diversified away by investing in both Sysgration and Chialin Precision 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 Sysgration and Chialin Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sysgration and Chialin Precision Industrial, you can compare the effects of market volatilities on Sysgration and Chialin Precision 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 Sysgration with a short position of Chialin Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sysgration and Chialin Precision.

Diversification Opportunities for Sysgration and Chialin Precision

0.2

Correlation Coefficient

Sysgration  Chialin Precision

Modest diversification

The 3 months correlation between Sysgration and Chialin is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sysgration and Chialin Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chialin Precision and Sysgration 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 Sysgration are associated (or correlated) with Chialin Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chialin Precision has no effect on the direction of Sysgration i.e., Sysgration and Chialin Precision go up and down completely randomly.

Pair Corralation between Sysgration and Chialin Precision

Assuming the 90 days trading horizon Sysgration is expected to generate 3.14 times more return on investment than Chialin Precision. However, Sysgration is 3.14 times more volatile than Chialin Precision Industrial. It trades about 0.06 of its potential returns per unit of risk. Chialin Precision Industrial is currently generating about 0.14 per unit of risk. If you would invest  3,565  in Sysgration on October 24, 2024 and sell it today you would earn a total of  330.00  from holding Sysgration or generate 9.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Sysgration  vs.  Chialin Precision Industrial

Sysgration

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sysgration are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sysgration showed solid returns over the last few months and may actually be approaching a breakup point.

Chialin Precision

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chialin Precision Industrial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chialin Precision may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sysgration and Chialin Precision

The main advantage of trading using opposite Sysgration and Chialin Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sysgration position performs unexpectedly, Chialin Precision 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 Chialin Precision will offset losses from the drop in Chialin Precision's long position.

The idea behind Sysgration and Chialin Precision Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.