Correlation Between Chinese Maritime and International Games
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and International Games 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 Chinese Maritime and International Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Maritime Transport and International Games System, you can compare the effects of market volatilities on Chinese Maritime and International Games 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 Chinese Maritime with a short position of International Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and International Games.
Diversification Opportunities for Chinese Maritime and International Games
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chinese and International is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and International Games System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Games and Chinese Maritime 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 Chinese Maritime Transport are associated (or correlated) with International Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Games has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and International Games go up and down completely randomly.
Pair Corralation between Chinese Maritime and International Games
Assuming the 90 days trading horizon Chinese Maritime is expected to generate 190.58 times less return on investment than International Games. But when comparing it to its historical volatility, Chinese Maritime Transport is 32.29 times less risky than International Games. It trades about 0.01 of its potential returns per unit of risk. International Games System is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 23,562 in International Games System on October 25, 2024 and sell it today you would earn a total of 71,038 from holding International Games System or generate 301.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Maritime Transport vs. International Games System
Performance |
| Timeline |
| Chinese Maritime Tra |
| International Games |
Chinese Maritime and International Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and International Games
The main advantage of trading using opposite Chinese Maritime and International Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, International Games 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 International Games will offset losses from the drop in International Games' long position.| Chinese Maritime vs. U Ming Marine Transport | Chinese Maritime vs. Sincere Navigation Corp | Chinese Maritime vs. Taiwan Navigation Co | Chinese Maritime vs. Huaku Development Co |
| International Games vs. BRIM Biotechnology | International Games vs. Apex Biotechnology Corp | International Games vs. Universal Vision Biotechnology | International Games vs. Phytohealth 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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