Correlation Between COFCO Joycome and ABO-GROUP ENVIRONMENT
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and ABO-GROUP ENVIRONMENT 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 COFCO Joycome and ABO-GROUP ENVIRONMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and ABO GROUP ENVIRONMENT, you can compare the effects of market volatilities on COFCO Joycome and ABO-GROUP ENVIRONMENT 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 COFCO Joycome with a short position of ABO-GROUP ENVIRONMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and ABO-GROUP ENVIRONMENT.
Diversification Opportunities for COFCO Joycome and ABO-GROUP ENVIRONMENT
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between COFCO and ABO-GROUP is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and ABO GROUP ENVIRONMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABO GROUP ENVIRONMENT and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with ABO-GROUP ENVIRONMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABO GROUP ENVIRONMENT has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and ABO-GROUP ENVIRONMENT go up and down completely randomly.
Pair Corralation between COFCO Joycome and ABO-GROUP ENVIRONMENT
Assuming the 90 days horizon COFCO Joycome Foods is expected to generate 2.38 times more return on investment than ABO-GROUP ENVIRONMENT. However, COFCO Joycome is 2.38 times more volatile than ABO GROUP ENVIRONMENT. It trades about 0.13 of its potential returns per unit of risk. ABO GROUP ENVIRONMENT is currently generating about -0.33 per unit of risk. If you would invest 16.00 in COFCO Joycome Foods on December 1, 2024 and sell it today you would earn a total of 1.00 from holding COFCO Joycome Foods or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
COFCO Joycome Foods vs. ABO GROUP ENVIRONMENT
Performance |
| Timeline |
| COFCO Joycome Foods |
| ABO GROUP ENVIRONMENT |
COFCO Joycome and ABO-GROUP ENVIRONMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and ABO-GROUP ENVIRONMENT
The main advantage of trading using opposite COFCO Joycome and ABO-GROUP ENVIRONMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, ABO-GROUP ENVIRONMENT 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 ABO-GROUP ENVIRONMENT will offset losses from the drop in ABO-GROUP ENVIRONMENT's long position.| COFCO Joycome vs. ALEFARM BREWING DK 05 | COFCO Joycome vs. Sanyo Chemical Industries | COFCO Joycome vs. Tokyu Construction Co | COFCO Joycome vs. Penta Ocean Construction Co |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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