Correlation Between UNITED URBAN and CGN Power
Can any of the company-specific risk be diversified away by investing in both UNITED URBAN and CGN Power 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 UNITED URBAN and CGN Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED URBAN INV and CGN Power Co, you can compare the effects of market volatilities on UNITED URBAN and CGN Power 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 UNITED URBAN with a short position of CGN Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED URBAN and CGN Power.
Diversification Opportunities for UNITED URBAN and CGN Power
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UNITED and CGN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding UNITED URBAN INV and CGN Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN Power and UNITED URBAN 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 UNITED URBAN INV are associated (or correlated) with CGN Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN Power has no effect on the direction of UNITED URBAN i.e., UNITED URBAN and CGN Power go up and down completely randomly.
Pair Corralation between UNITED URBAN and CGN Power
Assuming the 90 days horizon UNITED URBAN is expected to generate 28.11 times less return on investment than CGN Power. But when comparing it to its historical volatility, UNITED URBAN INV is 16.59 times less risky than CGN Power. It trades about 0.06 of its potential returns per unit of risk. CGN Power Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 17.00 in CGN Power Co on August 28, 2024 and sell it today you would earn a total of 11.00 from holding CGN Power Co or generate 64.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
UNITED URBAN INV vs. CGN Power Co
Performance |
| Timeline |
| UNITED URBAN INV |
| CGN Power |
UNITED URBAN and CGN Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED URBAN and CGN Power
The main advantage of trading using opposite UNITED URBAN and CGN Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED URBAN position performs unexpectedly, CGN Power 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 CGN Power will offset losses from the drop in CGN Power's long position.| UNITED URBAN vs. Apple Inc | UNITED URBAN vs. Apple Inc | UNITED URBAN vs. Apple Inc | UNITED URBAN vs. Apple Inc |
| CGN Power vs. Superior Plus Corp | CGN Power vs. NMI Holdings | CGN Power vs. Origin Agritech | CGN Power vs. SIVERS SEMICONDUCTORS AB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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