Correlation Between Camellia Metal and Sports Gear
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and Sports Gear 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 Sports Gear 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 Sports Gear Co, you can compare the effects of market volatilities on Camellia Metal and Sports Gear 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 Sports Gear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and Sports Gear.
Diversification Opportunities for Camellia Metal and Sports Gear
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Camellia and Sports is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and Sports Gear Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Gear 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 Sports Gear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Gear has no effect on the direction of Camellia Metal i.e., Camellia Metal and Sports Gear go up and down completely randomly.
Pair Corralation between Camellia Metal and Sports Gear
Assuming the 90 days trading horizon Camellia Metal is expected to generate 9.19 times less return on investment than Sports Gear. But when comparing it to its historical volatility, Camellia Metal Co is 3.24 times less risky than Sports Gear. It trades about 0.1 of its potential returns per unit of risk. Sports Gear Co is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 12,000 in Sports Gear Co on November 28, 2024 and sell it today you would earn a total of 4,250 from holding Sports Gear Co or generate 35.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Metal Co vs. Sports Gear Co
Performance |
| Timeline |
| Camellia Metal |
| Sports Gear |
Camellia Metal and Sports Gear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and Sports Gear
The main advantage of trading using opposite Camellia Metal and Sports Gear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, Sports Gear 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 Sports Gear will offset losses from the drop in Sports Gear's long position.| Camellia Metal vs. China Metal Products | Camellia Metal vs. Hwa Fong Rubber | Camellia Metal vs. Farglory FTZ Investment | Camellia Metal vs. Kenda Rubber Industrial |
| Sports Gear vs. Feng Tay Enterprises | Sports Gear vs. Pou Chen Corp | Sports Gear vs. Fulgent Sun International | Sports Gear vs. Taiwan Paiho |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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