Correlation Between Champion Building and China Glaze
Can any of the company-specific risk be diversified away by investing in both Champion Building and China Glaze 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 Champion Building and China Glaze into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Building Materials and China Glaze Co, you can compare the effects of market volatilities on Champion Building and China Glaze 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 Champion Building with a short position of China Glaze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Building and China Glaze.
Diversification Opportunities for Champion Building and China Glaze
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Champion and China is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Champion Building Materials and China Glaze Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Glaze and Champion Building 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 Champion Building Materials are associated (or correlated) with China Glaze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Glaze has no effect on the direction of Champion Building i.e., Champion Building and China Glaze go up and down completely randomly.
Pair Corralation between Champion Building and China Glaze
Assuming the 90 days trading horizon Champion Building Materials is expected to generate 0.53 times more return on investment than China Glaze. However, Champion Building Materials is 1.89 times less risky than China Glaze. It trades about 0.13 of its potential returns per unit of risk. China Glaze Co is currently generating about 0.07 per unit of risk. If you would invest 996.00 in Champion Building Materials on September 1, 2024 and sell it today you would earn a total of 44.00 from holding Champion Building Materials or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Champion Building Materials vs. China Glaze Co
Performance |
| Timeline |
| Champion Building |
| China Glaze |
Champion Building and China Glaze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Building and China Glaze
The main advantage of trading using opposite Champion Building and China Glaze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Building position performs unexpectedly, China Glaze 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 Glaze will offset losses from the drop in China Glaze's long position.| Champion Building vs. China Glaze Co | Champion Building vs. Chung Hwa Pulp | Champion Building vs. Taiwan Glass Ind | Champion Building vs. China Man Made Fiber |
| China Glaze vs. Basso Industry Corp | China Glaze vs. Chung Hsin Electric Machinery | China Glaze vs. TYC Brother Industrial | China Glaze 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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