Correlation Between CHINA DEVELOPMENT and StShine Optical
Can any of the company-specific risk be diversified away by investing in both CHINA DEVELOPMENT and StShine Optical 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 CHINA DEVELOPMENT and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA DEVELOPMENT FINANCIAL and StShine Optical Co, you can compare the effects of market volatilities on CHINA DEVELOPMENT and StShine Optical 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 CHINA DEVELOPMENT with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA DEVELOPMENT and StShine Optical.
Diversification Opportunities for CHINA DEVELOPMENT and StShine Optical
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHINA and StShine is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CHINA DEVELOPMENT FINANCIAL and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and CHINA DEVELOPMENT 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 CHINA DEVELOPMENT FINANCIAL are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of CHINA DEVELOPMENT i.e., CHINA DEVELOPMENT and StShine Optical go up and down completely randomly.
Pair Corralation between CHINA DEVELOPMENT and StShine Optical
Assuming the 90 days trading horizon CHINA DEVELOPMENT FINANCIAL is expected to generate 0.4 times more return on investment than StShine Optical. However, CHINA DEVELOPMENT FINANCIAL is 2.51 times less risky than StShine Optical. It trades about 0.02 of its potential returns per unit of risk. StShine Optical Co is currently generating about -0.03 per unit of risk. If you would invest 774.00 in CHINA DEVELOPMENT FINANCIAL on November 19, 2024 and sell it today you would earn a total of 29.00 from holding CHINA DEVELOPMENT FINANCIAL or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
CHINA DEVELOPMENT FINANCIAL vs. StShine Optical Co
Performance |
| Timeline |
| CHINA DEVELOPMENT |
| StShine Optical |
CHINA DEVELOPMENT and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA DEVELOPMENT and StShine Optical
The main advantage of trading using opposite CHINA DEVELOPMENT and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA DEVELOPMENT position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| CHINA DEVELOPMENT vs. BRIM Biotechnology | CHINA DEVELOPMENT vs. Chung Hwa Food | CHINA DEVELOPMENT vs. Asia Metal Industries | CHINA DEVELOPMENT vs. Wei Chuan Foods |
| StShine Optical vs. Prime Oil Chemical | StShine Optical vs. Eastern Media International | StShine Optical vs. Cayenne Entertainment Technology | StShine Optical vs. Standard Chemical Pharmaceutical |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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