Correlation Between Haisung TPC and CS BEARING
Can any of the company-specific risk be diversified away by investing in both Haisung TPC and CS BEARING 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 Haisung TPC and CS BEARING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haisung TPC Co and CS BEARING CoLtd, you can compare the effects of market volatilities on Haisung TPC and CS BEARING 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 Haisung TPC with a short position of CS BEARING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haisung TPC and CS BEARING.
Diversification Opportunities for Haisung TPC and CS BEARING
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haisung and 297090 is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Haisung TPC Co and CS BEARING CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS BEARING CoLtd and Haisung TPC 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 Haisung TPC Co are associated (or correlated) with CS BEARING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS BEARING CoLtd has no effect on the direction of Haisung TPC i.e., Haisung TPC and CS BEARING go up and down completely randomly.
Pair Corralation between Haisung TPC and CS BEARING
Assuming the 90 days trading horizon Haisung TPC Co is expected to generate 1.15 times more return on investment than CS BEARING. However, Haisung TPC is 1.15 times more volatile than CS BEARING CoLtd. It trades about -0.12 of its potential returns per unit of risk. CS BEARING CoLtd is currently generating about -0.26 per unit of risk. If you would invest 613,000 in Haisung TPC Co on August 29, 2024 and sell it today you would lose (70,000) from holding Haisung TPC Co or give up 11.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haisung TPC Co vs. CS BEARING CoLtd
Performance |
| Timeline |
| Haisung TPC |
| CS BEARING CoLtd |
Haisung TPC and CS BEARING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haisung TPC and CS BEARING
The main advantage of trading using opposite Haisung TPC and CS BEARING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haisung TPC position performs unexpectedly, CS BEARING 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 CS BEARING will offset losses from the drop in CS BEARING's long position.The idea behind Haisung TPC Co and CS BEARING CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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