Correlation Between China Steel and Gloria Material
Can any of the company-specific risk be diversified away by investing in both China Steel and Gloria Material 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 Steel and Gloria Material into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Steel Corp and Gloria Material Technology, you can compare the effects of market volatilities on China Steel and Gloria Material 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 Steel with a short position of Gloria Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Steel and Gloria Material.
Diversification Opportunities for China Steel and Gloria Material
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Gloria is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding China Steel Corp and Gloria Material Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gloria Material Tech and China Steel 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 Steel Corp are associated (or correlated) with Gloria Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gloria Material Tech has no effect on the direction of China Steel i.e., China Steel and Gloria Material go up and down completely randomly.
Pair Corralation between China Steel and Gloria Material
Assuming the 90 days trading horizon China Steel Corp is expected to under-perform the Gloria Material. But the stock apears to be less risky and, when comparing its historical volatility, China Steel Corp is 1.36 times less risky than Gloria Material. The stock trades about -0.14 of its potential returns per unit of risk. The Gloria Material Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,700 in Gloria Material Technology on August 30, 2024 and sell it today you would earn a total of 95.00 from holding Gloria Material Technology or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Steel Corp vs. Gloria Material Technology
Performance |
| Timeline |
| China Steel Corp |
| Gloria Material Tech |
China Steel and Gloria Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Steel and Gloria Material
The main advantage of trading using opposite China Steel and Gloria Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Steel position performs unexpectedly, Gloria Material 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 Gloria Material will offset losses from the drop in Gloria Material's long position.| China Steel vs. Formosa Plastics Corp | China Steel vs. Chunghwa Telecom Co | China Steel vs. Nan Ya Plastics | China Steel vs. Cathay Financial Holding |
| Gloria Material vs. Thunder Tiger Corp | Gloria Material vs. Synmosa Biopharma | Gloria Material vs. Taiwan Glass Ind | Gloria Material vs. Tong Tai Machine Tool |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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