Correlation Between Changshu Ruite and Cultural Investment
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By analyzing existing cross correlation between Changshu Ruite Electric and Cultural Investment Holdings, you can compare the effects of market volatilities on Changshu Ruite and Cultural Investment 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 Changshu Ruite with a short position of Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Ruite and Cultural Investment.
Diversification Opportunities for Changshu Ruite and Cultural Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changshu and Cultural is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Ruite Electric and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment and Changshu Ruite 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 Changshu Ruite Electric are associated (or correlated) with Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of Changshu Ruite i.e., Changshu Ruite and Cultural Investment go up and down completely randomly.
Pair Corralation between Changshu Ruite and Cultural Investment
Assuming the 90 days trading horizon Changshu Ruite is expected to generate 3.19 times less return on investment than Cultural Investment. But when comparing it to its historical volatility, Changshu Ruite Electric is 1.29 times less risky than Cultural Investment. It trades about 0.04 of its potential returns per unit of risk. Cultural Investment Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 206.00 in Cultural Investment Holdings on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Cultural Investment Holdings or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changshu Ruite Electric vs. Cultural Investment Holdings
Performance |
| Timeline |
| Changshu Ruite Electric |
| Cultural Investment |
Changshu Ruite and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Ruite and Cultural Investment
The main advantage of trading using opposite Changshu Ruite and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Ruite position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| Changshu Ruite vs. Cultural Investment Holdings | Changshu Ruite vs. Gome Telecom Equipment | Changshu Ruite vs. Bus Online Co | Changshu Ruite vs. Holitech Technology Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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