Correlation Between CHINA DEVELOPMENT and Ablerex Electronics
Can any of the company-specific risk be diversified away by investing in both CHINA DEVELOPMENT and Ablerex Electronics 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 Ablerex Electronics 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 Ablerex Electronics Co, you can compare the effects of market volatilities on CHINA DEVELOPMENT and Ablerex Electronics 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 Ablerex Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA DEVELOPMENT and Ablerex Electronics.
Diversification Opportunities for CHINA DEVELOPMENT and Ablerex Electronics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between CHINA and Ablerex is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CHINA DEVELOPMENT FINANCIAL and Ablerex Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ablerex Electronics 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 Ablerex Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ablerex Electronics has no effect on the direction of CHINA DEVELOPMENT i.e., CHINA DEVELOPMENT and Ablerex Electronics go up and down completely randomly.
Pair Corralation between CHINA DEVELOPMENT and Ablerex Electronics
Assuming the 90 days trading horizon CHINA DEVELOPMENT FINANCIAL is expected to generate 0.1 times more return on investment than Ablerex Electronics. However, CHINA DEVELOPMENT FINANCIAL is 9.76 times less risky than Ablerex Electronics. It trades about 0.41 of its potential returns per unit of risk. Ablerex Electronics Co is currently generating about -0.16 per unit of risk. If you would invest 784.00 in CHINA DEVELOPMENT FINANCIAL on October 25, 2024 and sell it today you would earn a total of 10.00 from holding CHINA DEVELOPMENT FINANCIAL or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA DEVELOPMENT FINANCIAL vs. Ablerex Electronics Co
Performance |
| Timeline |
| CHINA DEVELOPMENT |
| Ablerex Electronics |
CHINA DEVELOPMENT and Ablerex Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA DEVELOPMENT and Ablerex Electronics
The main advantage of trading using opposite CHINA DEVELOPMENT and Ablerex Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA DEVELOPMENT position performs unexpectedly, Ablerex Electronics 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 Ablerex Electronics will offset losses from the drop in Ablerex Electronics' long position.| CHINA DEVELOPMENT vs. Eastern Media International | CHINA DEVELOPMENT vs. GameSparcs Co | CHINA DEVELOPMENT vs. Formosa International Hotels | CHINA DEVELOPMENT vs. Hotel Holiday Garden |
| Ablerex Electronics vs. Advantech Co | Ablerex Electronics vs. IEI Integration Corp | Ablerex Electronics vs. Flytech Technology Co | Ablerex Electronics vs. Ennoconn 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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