Correlation Between Chunghwa Telecom and Crown Energy

Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Crown Energy 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 Chunghwa Telecom and Crown Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chunghwa Telecom Co and Crown Energy AB, you can compare the effects of market volatilities on Chunghwa Telecom and Crown Energy 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 Chunghwa Telecom with a short position of Crown Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Crown Energy.

Diversification Opportunities for Chunghwa Telecom and Crown Energy

0.0

Correlation Coefficient

Chunghwa Telecom  Crown Energy

Pay attention - limited upside

The 3 months correlation between Chunghwa and Crown is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Crown Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Energy AB and Chunghwa Telecom 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 Chunghwa Telecom Co are associated (or correlated) with Crown Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Energy AB has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Crown Energy go up and down completely randomly.

Pair Corralation between Chunghwa Telecom and Crown Energy

If you would invest  3,126  in Chunghwa Telecom Co on October 23, 2024 and sell it today you would earn a total of  514.00  from holding Chunghwa Telecom Co or generate 16.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

Chunghwa Telecom Co  vs.  Crown Energy AB

Chunghwa Telecom

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chunghwa Telecom Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Chunghwa Telecom is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Crown Energy AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Energy AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Crown Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Chunghwa Telecom and Crown Energy

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

The idea behind Chunghwa Telecom Co and Crown Energy AB 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.