Correlation Between Chicony Power and Advanced Ceramic

Can any of the company-specific risk be diversified away by investing in both Chicony Power and Advanced Ceramic 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 Advanced Ceramic 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 Advanced Ceramic X, you can compare the effects of market volatilities on Chicony Power and Advanced Ceramic 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 Advanced Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Advanced Ceramic.

Diversification Opportunities for Chicony Power and Advanced Ceramic

-0.39

Correlation Coefficient

Chicony Power  Advanced Ceramic

Very good diversification

The 3 months correlation between Chicony and Advanced is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Advanced Ceramic X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Ceramic X 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 Advanced Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Ceramic X has no effect on the direction of Chicony Power i.e., Chicony Power and Advanced Ceramic go up and down completely randomly.

Pair Corralation between Chicony Power and Advanced Ceramic

Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 0.88 times more return on investment than Advanced Ceramic. However, Chicony Power Technology is 1.14 times less risky than Advanced Ceramic. It trades about 0.03 of its potential returns per unit of risk. Advanced Ceramic X is currently generating about -0.07 per unit of risk. If you would invest  12,450  in Chicony Power Technology on December 5, 2024 and sell it today you would earn a total of  200.00  from holding Chicony Power Technology or generate 1.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Chicony Power Technology  vs.  Advanced Ceramic X

Chicony Power Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chicony Power Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Advanced Ceramic X

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advanced Ceramic X 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 Chicony Power and Advanced Ceramic

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

The idea behind Chicony Power Technology and Advanced Ceramic X 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.