Correlation Between China Securities and Aba Chemicals
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By analyzing existing cross correlation between China Securities 800 and Aba Chemicals Corp, you can compare the effects of market volatilities on China Securities 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 Securities with a short position of Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Aba Chemicals.
Diversification Opportunities for China Securities and Aba Chemicals
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Aba is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 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 Securities 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 Securities 800 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 Securities i.e., China Securities and Aba Chemicals go up and down completely randomly.
Pair Corralation between China Securities and Aba Chemicals
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.4 times more return on investment than Aba Chemicals. However, China Securities 800 is 2.47 times less risky than Aba Chemicals. It trades about 0.0 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about -0.1 per unit of risk. If you would invest 421,099 in China Securities 800 on August 31, 2024 and sell it today you would lose (1,295) from holding China Securities 800 or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Securities 800 vs. Aba Chemicals Corp
Performance |
| Timeline |
China Securities and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Aba Chemicals Corp
Pair trading matchups for Aba Chemicals
Pair Trading with China Securities and Aba Chemicals
The main advantage of trading using opposite China Securities and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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 Securities vs. Sinofibers Technology Co | China Securities vs. Anji Foodstuff Co | China Securities vs. Niutech Environment Technology | China Securities vs. Linewell Software 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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