Correlation Between China Reform and Aba Chemicals
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By analyzing existing cross correlation between China Reform Health and Aba Chemicals Corp, you can compare the effects of market volatilities on China Reform and Aba Chemicals 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 Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Reform and Aba Chemicals.
Diversification Opportunities for China Reform and Aba Chemicals
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Aba is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding China Reform Health and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp 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 Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of China Reform i.e., China Reform and Aba Chemicals go up and down completely randomly.
Pair Corralation between China Reform and Aba Chemicals
Assuming the 90 days trading horizon China Reform Health is expected to generate 0.96 times more return on investment than Aba Chemicals. However, China Reform Health is 1.04 times less risky than Aba Chemicals. It trades about 0.01 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about -0.02 per unit of risk. If you would invest 1,090 in China Reform Health on October 27, 2024 and sell it today you would lose (114.00) from holding China Reform Health or give up 10.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Reform Health vs. Aba Chemicals Corp
Performance |
| Timeline |
| China Reform Health |
| Aba Chemicals Corp |
China Reform and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Reform and Aba Chemicals
The main advantage of trading using opposite China Reform and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Reform position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' long position.| China Reform vs. Sichuan Newsnet Media | China Reform vs. Hainan Haiqi Transportation | China Reform vs. Heilongjiang Publishing Media | China Reform vs. Omnijoi Media Corp |
| Aba Chemicals vs. Chongqing Brewery Co | Aba Chemicals vs. Aluminum Corp of | Aba Chemicals vs. Hangzhou Arcvideo Technology | Aba Chemicals vs. Ningbo Tech Bank Co |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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