Correlation Between Chicony Power and Concord Securities

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

Diversification Opportunities for Chicony Power and Concord Securities

0.64

Correlation Coefficient

Chicony Power  Concord Securities

Poor diversification

The 3 months correlation between Chicony and Concord is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities 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 Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Chicony Power i.e., Chicony Power and Concord Securities go up and down completely randomly.

Pair Corralation between Chicony Power and Concord Securities

Assuming the 90 days trading horizon Chicony Power is expected to generate 2.77 times less return on investment than Concord Securities. In addition to that, Chicony Power is 1.53 times more volatile than Concord Securities Co. It trades about 0.03 of its total potential returns per unit of risk. Concord Securities Co is currently generating about 0.11 per unit of volatility. If you would invest  1,340  in Concord Securities Co on December 25, 2024 and sell it today you would earn a total of  85.00  from holding Concord Securities Co or generate 6.34% 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.  Concord Securities Co

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 2 (%) 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.

Concord Securities

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Concord Securities Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Concord Securities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Chicony Power and Concord Securities

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

The idea behind Chicony Power Technology and Concord Securities 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.