Correlation Between Chipbond Technology and Macroblock

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

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

Diversification Opportunities for Chipbond Technology and Macroblock

0.3

Correlation Coefficient

Chipbond Technology  Macroblock

Weak diversification

The 3 months correlation between Chipbond and Macroblock is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chipbond Technology and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock and Chipbond Technology 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 Chipbond Technology are associated (or correlated) with Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Chipbond Technology i.e., Chipbond Technology and Macroblock go up and down completely randomly.

Pair Corralation between Chipbond Technology and Macroblock

Assuming the 90 days trading horizon Chipbond Technology is expected to generate 0.89 times more return on investment than Macroblock. However, Chipbond Technology is 1.13 times less risky than Macroblock. It trades about -0.04 of its potential returns per unit of risk. Macroblock is currently generating about -0.24 per unit of risk. If you would invest  6,650  in Chipbond Technology on September 27, 2024 and sell it today you would lose (240.00) from holding Chipbond Technology or give up 3.61% of portfolio value over 90 days.

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

Chipbond Technology  vs.  Macroblock

Chipbond Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chipbond Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chipbond Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Macroblock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macroblock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Chipbond Technology and Macroblock

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

The idea behind Chipbond Technology and Macroblock 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.