Correlation Between Carnival Industrial and Hung Chou
Can any of the company-specific risk be diversified away by investing in both Carnival Industrial and Hung Chou 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 Carnival Industrial and Hung Chou into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival Industrial Corp and Hung Chou Fiber, you can compare the effects of market volatilities on Carnival Industrial and Hung Chou 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 Carnival Industrial with a short position of Hung Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Industrial and Hung Chou.
Diversification Opportunities for Carnival Industrial and Hung Chou
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carnival and Hung is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Carnival Industrial Corp and Hung Chou Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Chou Fiber and Carnival Industrial 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 Carnival Industrial Corp are associated (or correlated) with Hung Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Chou Fiber has no effect on the direction of Carnival Industrial i.e., Carnival Industrial and Hung Chou go up and down completely randomly.
Pair Corralation between Carnival Industrial and Hung Chou
Assuming the 90 days trading horizon Carnival Industrial Corp is expected to generate 1.03 times more return on investment than Hung Chou. However, Carnival Industrial is 1.03 times more volatile than Hung Chou Fiber. It trades about 0.42 of its potential returns per unit of risk. Hung Chou Fiber is currently generating about 0.33 per unit of risk. If you would invest 875.00 in Carnival Industrial Corp on November 28, 2024 and sell it today you would earn a total of 62.00 from holding Carnival Industrial Corp or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnival Industrial Corp vs. Hung Chou Fiber
Performance |
| Timeline |
| Carnival Industrial Corp |
| Hung Chou Fiber |
Carnival Industrial and Hung Chou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival Industrial and Hung Chou
The main advantage of trading using opposite Carnival Industrial and Hung Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Industrial position performs unexpectedly, Hung Chou 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 Hung Chou will offset losses from the drop in Hung Chou's long position.| Carnival Industrial vs. Jetway Information Co | Carnival Industrial vs. Mercuries Data Systems | Carnival Industrial vs. Formosa International Hotels | Carnival Industrial vs. Datavan International |
| Hung Chou vs. Huang Hsiang Construction | Hung Chou vs. Shieh Yih Machinery | Hung Chou vs. FDC International Hotels | Hung Chou vs. FarGlory Hotel 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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