Correlation Between Bosera CMSK and China World
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By analyzing existing cross correlation between Bosera CMSK Industrial and China World Trade, you can compare the effects of market volatilities on Bosera CMSK and China World 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 Bosera CMSK with a short position of China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosera CMSK and China World.
Diversification Opportunities for Bosera CMSK and China World
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bosera and China is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bosera CMSK Industrial and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade and Bosera CMSK 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 Bosera CMSK Industrial are associated (or correlated) with China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of Bosera CMSK i.e., Bosera CMSK and China World go up and down completely randomly.
Pair Corralation between Bosera CMSK and China World
Assuming the 90 days trading horizon Bosera CMSK Industrial is expected to generate 0.58 times more return on investment than China World. However, Bosera CMSK Industrial is 1.72 times less risky than China World. It trades about 0.47 of its potential returns per unit of risk. China World Trade is currently generating about 0.03 per unit of risk. If you would invest 207.00 in Bosera CMSK Industrial on November 8, 2024 and sell it today you would earn a total of 17.00 from holding Bosera CMSK Industrial or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bosera CMSK Industrial vs. China World Trade
Performance |
| Timeline |
| Bosera CMSK Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| China World Trade |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Bosera CMSK and China World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosera CMSK and China World
The main advantage of trading using opposite Bosera CMSK and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosera CMSK position performs unexpectedly, China World 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 World will offset losses from the drop in China World's long position.The idea behind Bosera CMSK Industrial and China World Trade pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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