Correlation Between Contemporary Amperex and Muyuan Foodstuff
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By analyzing existing cross correlation between Contemporary Amperex Technology and Muyuan Foodstuff Co, you can compare the effects of market volatilities on Contemporary Amperex and Muyuan Foodstuff 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 Contemporary Amperex with a short position of Muyuan Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contemporary Amperex and Muyuan Foodstuff.
Diversification Opportunities for Contemporary Amperex and Muyuan Foodstuff
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Contemporary and Muyuan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Contemporary Amperex Technolog and Muyuan Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muyuan Foodstuff and Contemporary Amperex 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 Contemporary Amperex Technology are associated (or correlated) with Muyuan Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muyuan Foodstuff has no effect on the direction of Contemporary Amperex i.e., Contemporary Amperex and Muyuan Foodstuff go up and down completely randomly.
Pair Corralation between Contemporary Amperex and Muyuan Foodstuff
Assuming the 90 days trading horizon Contemporary Amperex Technology is expected to generate 1.71 times more return on investment than Muyuan Foodstuff. However, Contemporary Amperex is 1.71 times more volatile than Muyuan Foodstuff Co. It trades about 0.0 of its potential returns per unit of risk. Muyuan Foodstuff Co is currently generating about -0.04 per unit of risk. If you would invest 25,754 in Contemporary Amperex Technology on November 3, 2024 and sell it today you would lose (54.00) from holding Contemporary Amperex Technology or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contemporary Amperex Technolog vs. Muyuan Foodstuff Co
Performance |
| Timeline |
| Contemporary Amperex |
| Muyuan Foodstuff |
Contemporary Amperex and Muyuan Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contemporary Amperex and Muyuan Foodstuff
The main advantage of trading using opposite Contemporary Amperex and Muyuan Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contemporary Amperex position performs unexpectedly, Muyuan Foodstuff 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 Muyuan Foodstuff will offset losses from the drop in Muyuan Foodstuff's long position.The idea behind Contemporary Amperex Technology and Muyuan Foodstuff Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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