Correlation Between China Glaze and Basso Industry
Can any of the company-specific risk be diversified away by investing in both China Glaze and Basso Industry 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 Glaze and Basso Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Glaze Co and Basso Industry Corp, you can compare the effects of market volatilities on China Glaze and Basso Industry 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 Glaze with a short position of Basso Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Glaze and Basso Industry.
Diversification Opportunities for China Glaze and Basso Industry
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Basso is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Glaze Co and Basso Industry Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basso Industry Corp and China Glaze 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 Glaze Co are associated (or correlated) with Basso Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basso Industry Corp has no effect on the direction of China Glaze i.e., China Glaze and Basso Industry go up and down completely randomly.
Pair Corralation between China Glaze and Basso Industry
Assuming the 90 days trading horizon China Glaze Co is expected to generate 2.52 times more return on investment than Basso Industry. However, China Glaze is 2.52 times more volatile than Basso Industry Corp. It trades about 0.05 of its potential returns per unit of risk. Basso Industry Corp is currently generating about 0.01 per unit of risk. If you would invest 1,284 in China Glaze Co on September 3, 2024 and sell it today you would earn a total of 866.00 from holding China Glaze Co or generate 67.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
China Glaze Co vs. Basso Industry Corp
Performance |
| Timeline |
| China Glaze |
| Basso Industry Corp |
China Glaze and Basso Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Glaze and Basso Industry
The main advantage of trading using opposite China Glaze and Basso Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Glaze position performs unexpectedly, Basso Industry 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 Basso Industry will offset losses from the drop in Basso Industry's long position.| China Glaze vs. Champion Building Materials | China Glaze vs. Taiwan Glass Ind | China Glaze vs. Chung Hwa Pulp | China Glaze vs. China Man Made Fiber |
| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |