Correlation Between Chicony Power and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Feng Ching 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 Chicony Power and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicony Power Technology and Feng Ching Metal, you can compare the effects of market volatilities on Chicony Power and Feng Ching 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 Chicony Power with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Feng Ching.
Diversification Opportunities for Chicony Power and Feng Ching
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicony and Feng is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and Chicony Power 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 Chicony Power Technology are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Chicony Power i.e., Chicony Power and Feng Ching go up and down completely randomly.
Pair Corralation between Chicony Power and Feng Ching
Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 0.94 times more return on investment than Feng Ching. However, Chicony Power Technology is 1.07 times less risky than Feng Ching. It trades about 0.06 of its potential returns per unit of risk. Feng Ching Metal is currently generating about -0.24 per unit of risk. If you would invest 12,450 in Chicony Power Technology on October 11, 2024 and sell it today you would earn a total of 250.00 from holding Chicony Power Technology or generate 2.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chicony Power Technology vs. Feng Ching Metal
Performance |
Timeline |
Chicony Power Technology |
Feng Ching Metal |
Chicony Power and Feng Ching Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chicony Power and Feng Ching
The main advantage of trading using opposite Chicony Power and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.Chicony Power vs. Sun Sea Construction | Chicony Power vs. PChome Online | Chicony Power vs. China Metal Products | Chicony Power vs. Te Chang Construction |
Feng Ching vs. Universal Microelectronics Co | Feng Ching vs. ABC Taiwan Electronics | Feng Ching vs. United Radiant Technology | Feng Ching vs. Chicony Power Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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