Correlation Between Muyuan Foodstuff and Changshu Ruite
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By analyzing existing cross correlation between Muyuan Foodstuff Co and Changshu Ruite Electric, you can compare the effects of market volatilities on Muyuan Foodstuff and Changshu Ruite 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 Muyuan Foodstuff with a short position of Changshu Ruite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muyuan Foodstuff and Changshu Ruite.
Diversification Opportunities for Muyuan Foodstuff and Changshu Ruite
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Muyuan and Changshu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Muyuan Foodstuff Co and Changshu Ruite Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Ruite Electric and Muyuan Foodstuff 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 Muyuan Foodstuff Co are associated (or correlated) with Changshu Ruite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Ruite Electric has no effect on the direction of Muyuan Foodstuff i.e., Muyuan Foodstuff and Changshu Ruite go up and down completely randomly.
Pair Corralation between Muyuan Foodstuff and Changshu Ruite
Assuming the 90 days trading horizon Muyuan Foodstuff Co is expected to under-perform the Changshu Ruite. But the stock apears to be less risky and, when comparing its historical volatility, Muyuan Foodstuff Co is 1.79 times less risky than Changshu Ruite. The stock trades about -0.31 of its potential returns per unit of risk. The Changshu Ruite Electric is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 763.00 in Changshu Ruite Electric on September 13, 2024 and sell it today you would earn a total of 36.00 from holding Changshu Ruite Electric or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muyuan Foodstuff Co vs. Changshu Ruite Electric
Performance |
| Timeline |
| Muyuan Foodstuff |
| Changshu Ruite Electric |
Muyuan Foodstuff and Changshu Ruite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muyuan Foodstuff and Changshu Ruite
The main advantage of trading using opposite Muyuan Foodstuff and Changshu Ruite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muyuan Foodstuff position performs unexpectedly, Changshu Ruite 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 Changshu Ruite will offset losses from the drop in Changshu Ruite's long position.| Muyuan Foodstuff vs. Nanjing Putian Telecommunications | Muyuan Foodstuff vs. Tianjin Realty Development | Muyuan Foodstuff vs. Kangyue Technology Co | Muyuan Foodstuff vs. Shenzhen Hifuture Electric |
| Changshu Ruite vs. Industrial and Commercial | Changshu Ruite vs. Agricultural Bank of | Changshu Ruite vs. China Construction Bank | Changshu Ruite vs. Bank of China |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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