Correlation Between Grab Holdings and Chunghwa Telecom
Can any of the company-specific risk be diversified away by investing in both Grab Holdings and Chunghwa Telecom 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 Grab Holdings and Chunghwa Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grab Holdings and Chunghwa Telecom Co, you can compare the effects of market volatilities on Grab Holdings and Chunghwa Telecom 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 Grab Holdings with a short position of Chunghwa Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grab Holdings and Chunghwa Telecom.
Diversification Opportunities for Grab Holdings and Chunghwa Telecom
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grab and Chunghwa is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Grab Holdings and Chunghwa Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Telecom and Grab Holdings 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 Grab Holdings are associated (or correlated) with Chunghwa Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Telecom has no effect on the direction of Grab Holdings i.e., Grab Holdings and Chunghwa Telecom go up and down completely randomly.
Pair Corralation between Grab Holdings and Chunghwa Telecom
Given the investment horizon of 90 days Grab Holdings is expected to under-perform the Chunghwa Telecom. In addition to that, Grab Holdings is 4.6 times more volatile than Chunghwa Telecom Co. It trades about -0.08 of its total potential returns per unit of risk. Chunghwa Telecom Co is currently generating about -0.14 per unit of volatility. If you would invest 3,842 in Chunghwa Telecom Co on September 26, 2024 and sell it today you would lose (54.00) from holding Chunghwa Telecom Co or give up 1.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Grab Holdings vs. Chunghwa Telecom Co
Performance |
Timeline |
Grab Holdings |
Chunghwa Telecom |
Grab Holdings and Chunghwa Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grab Holdings and Chunghwa Telecom
The main advantage of trading using opposite Grab Holdings and Chunghwa Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grab Holdings position performs unexpectedly, Chunghwa Telecom 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 Chunghwa Telecom will offset losses from the drop in Chunghwa Telecom's long position.Grab Holdings vs. LYFT Inc | Grab Holdings vs. Kingsoft Cloud Holdings | Grab Holdings vs. AMTD Digital | Grab Holdings vs. Zoom Video Communications |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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