Correlation Between Chia Her and Kunyue Development

Can any of the company-specific risk be diversified away by investing in both Chia Her and Kunyue Development 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 Chia Her and Kunyue Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chia Her Industrial and Kunyue Development Co, you can compare the effects of market volatilities on Chia Her and Kunyue Development 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 Chia Her with a short position of Kunyue Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Kunyue Development.

Diversification Opportunities for Chia Her and Kunyue Development

0.21

Correlation Coefficient

Chia Her  Kunyue Development

Modest diversification

The 3 months correlation between Chia and Kunyue is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Kunyue Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunyue Development and Chia Her 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 Chia Her Industrial are associated (or correlated) with Kunyue Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunyue Development has no effect on the direction of Chia Her i.e., Chia Her and Kunyue Development go up and down completely randomly.

Pair Corralation between Chia Her and Kunyue Development

Assuming the 90 days trading horizon Chia Her Industrial is expected to under-perform the Kunyue Development. In addition to that, Chia Her is 2.49 times more volatile than Kunyue Development Co. It trades about -0.06 of its total potential returns per unit of risk. Kunyue Development Co is currently generating about -0.06 per unit of volatility. If you would invest  3,865  in Kunyue Development Co on May 8, 2025 and sell it today you would lose (145.00) from holding Kunyue Development Co or give up 3.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Chia Her Industrial  vs.  Kunyue Development Co

Chia Her Industrial

Risk-Adjusted Performance

Weakest

Over the last 90 days Chia Her Industrial 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.

Kunyue Development

Risk-Adjusted Performance

Weakest

Over the last 90 days Kunyue Development Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kunyue Development is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Chia Her and Kunyue Development

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

The idea behind Chia Her Industrial and Kunyue Development 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..