Correlation Between China Minmetals and Digital China
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By analyzing existing cross correlation between China Minmetals Rare and Digital China Information, you can compare the effects of market volatilities on China Minmetals and Digital China 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 Minmetals with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Minmetals and Digital China.
Diversification Opportunities for China Minmetals and Digital China
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Digital is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China Minmetals Rare and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and China Minmetals 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 Minmetals Rare are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of China Minmetals i.e., China Minmetals and Digital China go up and down completely randomly.
Pair Corralation between China Minmetals and Digital China
Assuming the 90 days trading horizon China Minmetals Rare is expected to under-perform the Digital China. But the stock apears to be less risky and, when comparing its historical volatility, China Minmetals Rare is 1.15 times less risky than Digital China. The stock trades about -0.01 of its potential returns per unit of risk. The Digital China Information is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,147 in Digital China Information on October 11, 2024 and sell it today you would lose (135.00) from holding Digital China Information or give up 11.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Minmetals Rare vs. Digital China Information
Performance |
| Timeline |
| China Minmetals Rare |
| Digital China Information |
China Minmetals and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Minmetals and Digital China
The main advantage of trading using opposite China Minmetals and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Minmetals position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| China Minmetals vs. Guocheng Mining Co | China Minmetals vs. SSAW Hotels Resorts | China Minmetals vs. Qtone Education Group | China Minmetals vs. Chengtun Mining Group |
| Digital China vs. China Minmetals Rare | Digital China vs. Xinjiang Baodi Mining | Digital China vs. Lotus Health Group | Digital China vs. Hefei Metalforming Mach |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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