Correlation Between Chainqui Construction and Cathay Real
Can any of the company-specific risk be diversified away by investing in both Chainqui Construction and Cathay Real 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 Chainqui Construction and Cathay Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainqui Construction Development and Cathay Real Estate, you can compare the effects of market volatilities on Chainqui Construction and Cathay Real 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 Chainqui Construction with a short position of Cathay Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainqui Construction and Cathay Real.
Diversification Opportunities for Chainqui Construction and Cathay Real
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chainqui and Cathay is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Chainqui Construction Developm and Cathay Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Real Estate and Chainqui Construction 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 Chainqui Construction Development are associated (or correlated) with Cathay Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Real Estate has no effect on the direction of Chainqui Construction i.e., Chainqui Construction and Cathay Real go up and down completely randomly.
Pair Corralation between Chainqui Construction and Cathay Real
Assuming the 90 days trading horizon Chainqui Construction is expected to generate 2.87 times less return on investment than Cathay Real. But when comparing it to its historical volatility, Chainqui Construction Development is 1.16 times less risky than Cathay Real. It trades about 0.03 of its potential returns per unit of risk. Cathay Real Estate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,645 in Cathay Real Estate on August 27, 2024 and sell it today you would earn a total of 915.00 from holding Cathay Real Estate or generate 55.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chainqui Construction Developm vs. Cathay Real Estate
Performance |
| Timeline |
| Chainqui Construction |
| Cathay Real Estate |
Chainqui Construction and Cathay Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chainqui Construction and Cathay Real
The main advantage of trading using opposite Chainqui Construction and Cathay Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainqui Construction position performs unexpectedly, Cathay Real 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 Cathay Real will offset losses from the drop in Cathay Real's long position.| Chainqui Construction vs. Sunny Friend Environmental | Chainqui Construction vs. TTET Union Corp | Chainqui Construction vs. ECOVE Environment Corp | Chainqui Construction vs. Yulon Finance Corp |
| Cathay Real vs. Chainqui Construction Development | Cathay Real vs. Zinwell | Cathay Real vs. Symtek Automation Asia | Cathay Real vs. CTCI 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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