Correlation Between Camellia Metal and Group Up
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and Group Up 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 Group Up 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 Group Up Industrial, you can compare the effects of market volatilities on Camellia Metal and Group Up 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 Group Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and Group Up.
Diversification Opportunities for Camellia Metal and Group Up
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Camellia and Group is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and Group Up Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Up Industrial 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 Group Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Up Industrial has no effect on the direction of Camellia Metal i.e., Camellia Metal and Group Up go up and down completely randomly.
Pair Corralation between Camellia Metal and Group Up
Assuming the 90 days trading horizon Camellia Metal Co is expected to under-perform the Group Up. In addition to that, Camellia Metal is 1.08 times more volatile than Group Up Industrial. It trades about -0.21 of its total potential returns per unit of risk. Group Up Industrial is currently generating about -0.2 per unit of volatility. If you would invest 28,350 in Group Up Industrial on August 30, 2024 and sell it today you would lose (2,750) from holding Group Up Industrial or give up 9.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Camellia Metal Co vs. Group Up Industrial
Performance |
| Timeline |
| Camellia Metal |
| Group Up Industrial |
Camellia Metal and Group Up Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and Group Up
The main advantage of trading using opposite Camellia Metal and Group Up positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, Group Up 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 Group Up will offset losses from the drop in Group Up's long position.| Camellia Metal vs. Catcher Technology Co | Camellia Metal vs. Solar Applied Materials | Camellia Metal vs. Shin Zu Shing | Camellia Metal vs. China Metal Products |
| Group Up vs. Sports Gear Co | Group Up vs. Chinese Gamer International | Group Up vs. International Games System | Group Up vs. Chain Chon Industrial |
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.
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