Correlation Between Basso Industry and International CSRC
Can any of the company-specific risk be diversified away by investing in both Basso Industry and International CSRC 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 Basso Industry and International CSRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basso Industry Corp and International CSRC Investment, you can compare the effects of market volatilities on Basso Industry and International CSRC 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 Basso Industry with a short position of International CSRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basso Industry and International CSRC.
Diversification Opportunities for Basso Industry and International CSRC
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Basso and International is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Basso Industry Corp and International CSRC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International CSRC and Basso Industry 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 Basso Industry Corp are associated (or correlated) with International CSRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International CSRC has no effect on the direction of Basso Industry i.e., Basso Industry and International CSRC go up and down completely randomly.
Pair Corralation between Basso Industry and International CSRC
Assuming the 90 days trading horizon Basso Industry Corp is expected to generate 0.96 times more return on investment than International CSRC. However, Basso Industry Corp is 1.05 times less risky than International CSRC. It trades about 0.01 of its potential returns per unit of risk. International CSRC Investment is currently generating about -0.06 per unit of risk. If you would invest 4,180 in Basso Industry Corp on August 31, 2024 and sell it today you would earn a total of 75.00 from holding Basso Industry Corp or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basso Industry Corp vs. International CSRC Investment
Performance |
| Timeline |
| Basso Industry Corp |
| International CSRC |
Basso Industry and International CSRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basso Industry and International CSRC
The main advantage of trading using opposite Basso Industry and International CSRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basso Industry position performs unexpectedly, International CSRC 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 International CSRC will offset losses from the drop in International CSRC's long position.| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
| International CSRC vs. Basso Industry Corp | International CSRC vs. Chung Hsin Electric Machinery | International CSRC vs. TYC Brother Industrial | International CSRC vs. TECO Electric Machinery |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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