Correlation Between Chin Yang and Automobile
Can any of the company-specific risk be diversified away by investing in both Chin Yang and Automobile at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chin Yang and Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Yang Chemical and Automobile Pc, you can compare the effects of market volatilities on Chin Yang and Automobile 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 Chin Yang with a short position of Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and Automobile.
Diversification Opportunities for Chin Yang and Automobile
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chin and Automobile is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Chin Yang i.e., Chin Yang and Automobile go up and down completely randomly.
Pair Corralation between Chin Yang and Automobile
Assuming the 90 days trading horizon Chin Yang Chemical is expected to generate 0.55 times more return on investment than Automobile. However, Chin Yang Chemical is 1.81 times less risky than Automobile. It trades about -0.01 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.07 per unit of risk. If you would invest 292,489 in Chin Yang Chemical on August 25, 2024 and sell it today you would lose (27,989) from holding Chin Yang Chemical or give up 9.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Yang Chemical vs. Automobile Pc
Performance |
| Timeline |
| Chin Yang Chemical |
| Automobile Pc |
Chin Yang and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Yang and Automobile
The main advantage of trading using opposite Chin Yang and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
| Automobile vs. Busan Industrial Co | Automobile vs. Busan Ind | Automobile vs. Mirae Asset Daewoo | Automobile vs. UNISEM 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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