Correlation Between Chunghwa Telecom and JCDecaux

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

Diversification Opportunities for Chunghwa Telecom and JCDecaux

0.23

Correlation Coefficient

Chunghwa Telecom  JCDecaux

Modest diversification

The 3 months correlation between Chunghwa and JCDecaux is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and JCDecaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCDecaux SA 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 JCDecaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCDecaux SA has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and JCDecaux go up and down completely randomly.

Pair Corralation between Chunghwa Telecom and JCDecaux

Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.8 times more return on investment than JCDecaux. However, Chunghwa Telecom Co is 1.25 times less risky than JCDecaux. It trades about 0.14 of its potential returns per unit of risk. JCDecaux SA is currently generating about 0.06 per unit of risk. If you would invest  3,296  in Chunghwa Telecom Co on April 24, 2025 and sell it today you would earn a total of  444.00  from holding Chunghwa Telecom Co or generate 13.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Chunghwa Telecom Co  vs.  JCDecaux SA

Chunghwa Telecom

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chunghwa Telecom Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Chunghwa Telecom reported solid returns over the last few months and may actually be approaching a breakup point.

JCDecaux SA

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Chunghwa Telecom and JCDecaux

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

The idea behind Chunghwa Telecom Co and JCDecaux SA 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.