Correlation Between China Reform and De Rucci
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By analyzing existing cross correlation between China Reform Health and De Rucci Healthy, you can compare the effects of market volatilities on China Reform and De Rucci 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 China Reform with a short position of De Rucci. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Reform and De Rucci.
Diversification Opportunities for China Reform and De Rucci
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and 001323 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding China Reform Health and De Rucci Healthy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Rucci Healthy and China Reform 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 China Reform Health are associated (or correlated) with De Rucci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Rucci Healthy has no effect on the direction of China Reform i.e., China Reform and De Rucci go up and down completely randomly.
Pair Corralation between China Reform and De Rucci
Assuming the 90 days trading horizon China Reform Health is expected to generate 1.5 times more return on investment than De Rucci. However, China Reform is 1.5 times more volatile than De Rucci Healthy. It trades about 0.02 of its potential returns per unit of risk. De Rucci Healthy is currently generating about 0.03 per unit of risk. If you would invest 1,142 in China Reform Health on August 29, 2024 and sell it today you would earn a total of 118.00 from holding China Reform Health or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Reform Health vs. De Rucci Healthy
Performance |
| Timeline |
| China Reform Health |
| De Rucci Healthy |
China Reform and De Rucci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Reform and De Rucci
The main advantage of trading using opposite China Reform and De Rucci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Reform position performs unexpectedly, De Rucci 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 De Rucci will offset losses from the drop in De Rucci's long position.| China Reform vs. Industrial and Commercial | China Reform vs. China Construction Bank | China Reform vs. Agricultural Bank of | China Reform vs. Bank of China |
| De Rucci vs. Agricultural Bank of | De Rucci vs. Industrial and Commercial | De Rucci vs. Bank of China | De Rucci vs. China Construction Bank |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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