Correlation Between Chunghwa Telecom and KELLOGG -

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

Diversification Opportunities for Chunghwa Telecom and KELLOGG -

0.69

Correlation Coefficient

Chunghwa Telecom  KELLOGG -

Poor diversification

The 3 months correlation between Chunghwa and KELLOGG is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and KELLOGG Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KELLOGG Dusseldorf 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 KELLOGG -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KELLOGG Dusseldorf has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and KELLOGG - go up and down completely randomly.

Pair Corralation between Chunghwa Telecom and KELLOGG -

Assuming the 90 days trading horizon Chunghwa Telecom is expected to generate 68.39 times less return on investment than KELLOGG -. But when comparing it to its historical volatility, Chunghwa Telecom Co is 1.05 times less risky than KELLOGG -. It trades about 0.0 of its potential returns per unit of risk. KELLOGG Dusseldorf is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  7,626  in KELLOGG Dusseldorf on October 10, 2024 and sell it today you would earn a total of  168.00  from holding KELLOGG Dusseldorf or generate 2.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

Chunghwa Telecom Co  vs.  KELLOGG Dusseldorf

Chunghwa Telecom

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chunghwa Telecom Co are ranked lower than 6 (%) 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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

KELLOGG Dusseldorf

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KELLOGG Dusseldorf are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, KELLOGG - may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chunghwa Telecom and KELLOGG -

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

The idea behind Chunghwa Telecom Co and KELLOGG Dusseldorf 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.