Correlation Between Chunghwa Telecom and Qualcomm

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

Diversification Opportunities for Chunghwa Telecom and Qualcomm

0.65

Correlation Coefficient

Chunghwa Telecom  Qualcomm

Poor diversification

The 3 months correlation between Chunghwa and Qualcomm is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co, and Qualcomm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualcomm 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 Qualcomm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualcomm has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Qualcomm go up and down completely randomly.

Pair Corralation between Chunghwa Telecom and Qualcomm

Assuming the 90 days trading horizon Chunghwa Telecom Co, is expected to generate 1.1 times more return on investment than Qualcomm. However, Chunghwa Telecom is 1.1 times more volatile than Qualcomm. It trades about 0.09 of its potential returns per unit of risk. Qualcomm is currently generating about 0.06 per unit of risk. If you would invest  5,580  in Chunghwa Telecom Co, on April 19, 2025 and sell it today you would earn a total of  630.00  from holding Chunghwa Telecom Co, or generate 11.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Chunghwa Telecom Co,  vs.  Qualcomm

Chunghwa Telecom Co,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chunghwa Telecom Co, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, Chunghwa Telecom may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Qualcomm

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qualcomm are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Qualcomm may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Chunghwa Telecom and Qualcomm

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

The idea behind Chunghwa Telecom Co, and Qualcomm 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.