Correlation Between Advanced Technology and China Resources
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By analyzing existing cross correlation between Advanced Technology Materials and China Resources Microelectronics, you can compare the effects of market volatilities on Advanced Technology and China Resources 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 Advanced Technology with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Technology and China Resources.
Diversification Opportunities for Advanced Technology and China Resources
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advanced and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Technology Materials and China Resources Microelectroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Micr and Advanced Technology 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 Advanced Technology Materials are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Micr has no effect on the direction of Advanced Technology i.e., Advanced Technology and China Resources go up and down completely randomly.
Pair Corralation between Advanced Technology and China Resources
Assuming the 90 days trading horizon Advanced Technology Materials is expected to generate 1.01 times more return on investment than China Resources. However, Advanced Technology is 1.01 times more volatile than China Resources Microelectronics. It trades about 0.05 of its potential returns per unit of risk. China Resources Microelectronics is currently generating about 0.0 per unit of risk. If you would invest 795.00 in Advanced Technology Materials on September 12, 2024 and sell it today you would earn a total of 423.00 from holding Advanced Technology Materials or generate 53.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Advanced Technology Materials vs. China Resources Microelectroni
Performance |
| Timeline |
| Advanced Technology |
| China Resources Micr |
Advanced Technology and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Technology and China Resources
The main advantage of trading using opposite Advanced Technology and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Technology position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Advanced Technology vs. Zijin Mining Group | Advanced Technology vs. Wanhua Chemical Group | Advanced Technology vs. Baoshan Iron Steel | Advanced Technology vs. Rongsheng Petrochemical Co |
| China Resources vs. Gansu Jiu Steel | China Resources vs. Shandong Mining Machinery | China Resources vs. Aba Chemicals Corp | China Resources vs. BlueFocus Communication Group |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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