Correlation Between Camellia Metal and China Metal
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and China Metal 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 Camellia Metal and China Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Metal Co and China Metal Products, you can compare the effects of market volatilities on Camellia Metal and China Metal 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 Camellia Metal with a short position of China Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and China Metal.
Diversification Opportunities for Camellia Metal and China Metal
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Camellia and China is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and China Metal Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Metal Products and Camellia Metal 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 Camellia Metal Co are associated (or correlated) with China Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Metal Products has no effect on the direction of Camellia Metal i.e., Camellia Metal and China Metal go up and down completely randomly.
Pair Corralation between Camellia Metal and China Metal
Assuming the 90 days trading horizon Camellia Metal Co is expected to under-perform the China Metal. But the stock apears to be less risky and, when comparing its historical volatility, Camellia Metal Co is 1.19 times less risky than China Metal. The stock trades about -0.02 of its potential returns per unit of risk. The China Metal Products is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,165 in China Metal Products on November 1, 2024 and sell it today you would lose (150.00) from holding China Metal Products or give up 4.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Metal Co vs. China Metal Products
Performance |
| Timeline |
| Camellia Metal |
| China Metal Products |
Camellia Metal and China Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and China Metal
The main advantage of trading using opposite Camellia Metal and China Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, China Metal 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 Metal will offset losses from the drop in China Metal's long position.| Camellia Metal vs. Zhen Ding Technology | Camellia Metal vs. Genovate Biotechnology Co | Camellia Metal vs. Asmedia Technology | Camellia Metal vs. Fubon Taiwan Technology |
| China Metal vs. Basso Industry Corp | China Metal vs. Chung Hsin Electric Machinery | China Metal vs. TYC Brother Industrial | China Metal 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |