Correlation Between Awea Mechantronic and China Electric
Can any of the company-specific risk be diversified away by investing in both Awea Mechantronic and China Electric 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 Awea Mechantronic and China Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Awea Mechantronic Co and China Electric Manufacturing, you can compare the effects of market volatilities on Awea Mechantronic and China Electric 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 Awea Mechantronic with a short position of China Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awea Mechantronic and China Electric.
Diversification Opportunities for Awea Mechantronic and China Electric
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Awea and China is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Awea Mechantronic Co and China Electric Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Electric Manuf and Awea Mechantronic 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 Awea Mechantronic Co are associated (or correlated) with China Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Electric Manuf has no effect on the direction of Awea Mechantronic i.e., Awea Mechantronic and China Electric go up and down completely randomly.
Pair Corralation between Awea Mechantronic and China Electric
Assuming the 90 days trading horizon Awea Mechantronic Co is expected to under-perform the China Electric. But the stock apears to be less risky and, when comparing its historical volatility, Awea Mechantronic Co is 1.31 times less risky than China Electric. The stock trades about -0.02 of its potential returns per unit of risk. The China Electric Manufacturing is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,720 in China Electric Manufacturing on September 3, 2024 and sell it today you would lose (10.00) from holding China Electric Manufacturing or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Awea Mechantronic Co vs. China Electric Manufacturing
Performance |
| Timeline |
| Awea Mechantronic |
| China Electric Manuf |
Awea Mechantronic and China Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Awea Mechantronic and China Electric
The main advantage of trading using opposite Awea Mechantronic and China Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awea Mechantronic position performs unexpectedly, China Electric 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 Electric will offset losses from the drop in China Electric's long position.| Awea Mechantronic vs. Anderson Industrial Corp | Awea Mechantronic vs. Kaulin Mfg | Awea Mechantronic vs. Roundtop Machinery Industries | Awea Mechantronic vs. Tong Tai Machine Tool |
| China Electric vs. Universal Microelectronics Co | China Electric vs. AVerMedia Technologies | China Electric vs. Symtek Automation Asia | China Electric vs. WiseChip Semiconductor |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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