Correlation Between Renaissance Europe and CHINA HUARONG
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By analyzing existing cross correlation between Renaissance Europe C and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on Renaissance Europe and CHINA HUARONG 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 Renaissance Europe with a short position of CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renaissance Europe and CHINA HUARONG.
Diversification Opportunities for Renaissance Europe and CHINA HUARONG
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Renaissance and CHINA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Renaissance Europe C and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD and Renaissance Europe 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 Renaissance Europe C are associated (or correlated) with CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of Renaissance Europe i.e., Renaissance Europe and CHINA HUARONG go up and down completely randomly.
Pair Corralation between Renaissance Europe and CHINA HUARONG
Assuming the 90 days trading horizon Renaissance Europe C is expected to under-perform the CHINA HUARONG. But the fund apears to be less risky and, when comparing its historical volatility, Renaissance Europe C is 30.02 times less risky than CHINA HUARONG. The fund trades about -0.05 of its potential returns per unit of risk. The CHINA HUARONG ENERHD 50 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.35 in CHINA HUARONG ENERHD 50 on September 1, 2024 and sell it today you would lose (0.20) from holding CHINA HUARONG ENERHD 50 or give up 57.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renaissance Europe C vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| Renaissance Europe |
| CHINA HUARONG ENERHD |
Renaissance Europe and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renaissance Europe and CHINA HUARONG
The main advantage of trading using opposite Renaissance Europe and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renaissance Europe position performs unexpectedly, CHINA HUARONG 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 HUARONG will offset losses from the drop in CHINA HUARONG's long position.| Renaissance Europe vs. Echiquier Major SRI | Renaissance Europe vs. Superior Plus Corp | Renaissance Europe vs. Origin Agritech | Renaissance Europe vs. Identiv |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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