Correlation Between China Energy and Vinci S
Can any of the company-specific risk be diversified away by investing in both China Energy and Vinci S 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 Energy and Vinci S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Energy Engineering and Vinci S A, you can compare the effects of market volatilities on China Energy and Vinci S 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 Energy with a short position of Vinci S. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Energy and Vinci S.
Diversification Opportunities for China Energy and Vinci S
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Vinci is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Energy Engineering and Vinci S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci S A and China Energy 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 Energy Engineering are associated (or correlated) with Vinci S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci S A has no effect on the direction of China Energy i.e., China Energy and Vinci S go up and down completely randomly.
Pair Corralation between China Energy and Vinci S
Assuming the 90 days horizon China Energy Engineering is expected to generate 3.2 times more return on investment than Vinci S. However, China Energy is 3.2 times more volatile than Vinci S A. It trades about 0.11 of its potential returns per unit of risk. Vinci S A is currently generating about -0.05 per unit of risk. If you would invest 6.95 in China Energy Engineering on August 28, 2024 and sell it today you would earn a total of 5.05 from holding China Energy Engineering or generate 72.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Energy Engineering vs. Vinci S A
Performance |
| Timeline |
| China Energy Engineering |
| Vinci S A |
China Energy and Vinci S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Energy and Vinci S
The main advantage of trading using opposite China Energy and Vinci S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Energy position performs unexpectedly, Vinci S 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 Vinci S will offset losses from the drop in Vinci S's long position.| China Energy vs. China Railway Construction | China Energy vs. AECOM | China Energy vs. Superior Plus Corp | China Energy vs. NMI Holdings |
| Vinci S vs. China Railway Construction | Vinci S vs. AECOM | Vinci S vs. Superior Plus Corp | Vinci S vs. NMI Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |