Correlation Between Digital China and Industrial
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By analyzing existing cross correlation between Digital China Information and Industrial and Commercial, you can compare the effects of market volatilities on Digital China and Industrial 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 Digital China with a short position of Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Industrial.
Diversification Opportunities for Digital China and Industrial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digital and Industrial is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Information and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial and Digital China 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 Digital China Information are associated (or correlated) with Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Digital China i.e., Digital China and Industrial go up and down completely randomly.
Pair Corralation between Digital China and Industrial
Assuming the 90 days trading horizon Digital China is expected to generate 7.48 times less return on investment than Industrial. In addition to that, Digital China is 2.4 times more volatile than Industrial and Commercial. It trades about 0.01 of its total potential returns per unit of risk. Industrial and Commercial is currently generating about 0.09 per unit of volatility. If you would invest 406.00 in Industrial and Commercial on October 11, 2024 and sell it today you would earn a total of 270.00 from holding Industrial and Commercial or generate 66.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital China Information vs. Industrial and Commercial
Performance |
| Timeline |
| Digital China Information |
| Industrial and Commercial |
Digital China and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital China and Industrial
The main advantage of trading using opposite Digital China and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.| Digital China vs. Kuang Chi Technologies | Digital China vs. Wuhan Yangtze Communication | Digital China vs. Runjian Communication Co | Digital China vs. FSPG Hi Tech Co |
| Industrial vs. Digital China Information | Industrial vs. Wonders Information | Industrial vs. Qijing Machinery | Industrial vs. Ningbo Construction 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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