Correlation Between China Steel and Vanguard International
Can any of the company-specific risk be diversified away by investing in both China Steel and Vanguard International 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 Vanguard International 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 Vanguard International Semiconductor, you can compare the effects of market volatilities on China Steel and Vanguard International 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 Vanguard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Steel and Vanguard International.
Diversification Opportunities for China Steel and Vanguard International
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Vanguard is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding China Steel Corp and Vanguard International Semicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard International 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 Vanguard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard International has no effect on the direction of China Steel i.e., China Steel and Vanguard International go up and down completely randomly.
Pair Corralation between China Steel and Vanguard International
Assuming the 90 days trading horizon China Steel Corp is expected to generate 0.85 times more return on investment than Vanguard International. However, China Steel Corp is 1.18 times less risky than Vanguard International. It trades about -0.08 of its potential returns per unit of risk. Vanguard International Semiconductor is currently generating about -0.33 per unit of risk. If you would invest 2,275 in China Steel Corp on August 28, 2024 and sell it today you would lose (45.00) from holding China Steel Corp or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Steel Corp vs. Vanguard International Semicon
Performance |
| Timeline |
| China Steel Corp |
| Vanguard International |
China Steel and Vanguard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Steel and Vanguard International
The main advantage of trading using opposite China Steel and Vanguard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Steel position performs unexpectedly, Vanguard International 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 Vanguard International will offset losses from the drop in Vanguard International's long position.The idea behind China Steel Corp and Vanguard International Semiconductor 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.| Vanguard International vs. Global Unichip Corp | Vanguard International vs. Asmedia Technology | Vanguard International vs. Unimicron Technology Corp | Vanguard International vs. Novatek Microelectronics Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |