Correlation Between Scan D and Chenbro Micom

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

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

Diversification Opportunities for Scan D and Chenbro Micom

0.81

Correlation Coefficient

Scan D  Chenbro Micom

Very poor diversification

The 3 months correlation between Scan and Chenbro is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Scan D and Chenbro Micom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenbro Micom and Scan D 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 Scan D are associated (or correlated) with Chenbro Micom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenbro Micom has no effect on the direction of Scan D i.e., Scan D and Chenbro Micom go up and down completely randomly.

Pair Corralation between Scan D and Chenbro Micom

Assuming the 90 days trading horizon Scan D is expected to generate 0.76 times more return on investment than Chenbro Micom. However, Scan D is 1.32 times less risky than Chenbro Micom. It trades about -0.09 of its potential returns per unit of risk. Chenbro Micom Co is currently generating about -0.08 per unit of risk. If you would invest  3,805  in Scan D on October 23, 2024 and sell it today you would lose (425.00) from holding Scan D or give up 11.17% of portfolio value over 90 days.

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

Scan D  vs.  Chenbro Micom Co

Scan D

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scan D has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Chenbro Micom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chenbro Micom Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Scan D and Chenbro Micom

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

The idea behind Scan D and Chenbro Micom Co 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.