Correlation Between Chicony Power and Feng Ching

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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 Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Chicony Power Technology  vs.  Feng Ching Metal

 Performance 
       Timeline  
Chicony Power Technology 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Feng Ching Metal 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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.
The idea behind Chicony Power Technology and Feng Ching Metal 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.
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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