Correlation Between China Man and Tycoons Group
Can any of the company-specific risk be diversified away by investing in both China Man and Tycoons Group 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 China Man and Tycoons Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Man Made Fiber and Tycoons Group Enterprise, you can compare the effects of market volatilities on China Man and Tycoons Group 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 China Man with a short position of Tycoons Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Man and Tycoons Group.
Diversification Opportunities for China Man and Tycoons Group
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Tycoons is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding China Man Made Fiber and Tycoons Group Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tycoons Group Enterprise and China Man 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 China Man Made Fiber are associated (or correlated) with Tycoons Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tycoons Group Enterprise has no effect on the direction of China Man i.e., China Man and Tycoons Group go up and down completely randomly.
Pair Corralation between China Man and Tycoons Group
Assuming the 90 days trading horizon China Man Made Fiber is expected to generate 0.87 times more return on investment than Tycoons Group. However, China Man Made Fiber is 1.15 times less risky than Tycoons Group. It trades about 0.0 of its potential returns per unit of risk. Tycoons Group Enterprise is currently generating about -0.15 per unit of risk. If you would invest 789.00 in China Man Made Fiber on September 13, 2024 and sell it today you would lose (3.00) from holding China Man Made Fiber or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Man Made Fiber vs. Tycoons Group Enterprise
Performance |
| Timeline |
| China Man Made |
| Tycoons Group Enterprise |
China Man and Tycoons Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Man and Tycoons Group
The main advantage of trading using opposite China Man and Tycoons Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Man position performs unexpectedly, Tycoons Group 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 Tycoons Group will offset losses from the drop in Tycoons Group's long position.| China Man vs. Oriental Union Chemical | China Man vs. China Petrochemical Development | China Man vs. Taiwan Styrene Monomer | China Man vs. Grand Pacific Petrochemical |
| Tycoons Group vs. Quintain Steel Co | Tycoons Group vs. Chung Hwa Pulp | Tycoons Group vs. China Man Made Fiber | Tycoons Group vs. Sunko Ink 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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