Correlation Between Chenming Mold and Gigastorage Corp
Can any of the company-specific risk be diversified away by investing in both Chenming Mold and Gigastorage Corp 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 Chenming Mold and Gigastorage Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chenming Mold Industrial and Gigastorage Corp, you can compare the effects of market volatilities on Chenming Mold and Gigastorage Corp 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 Chenming Mold with a short position of Gigastorage Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chenming Mold and Gigastorage Corp.
Diversification Opportunities for Chenming Mold and Gigastorage Corp
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chenming and Gigastorage is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Chenming Mold Industrial and Gigastorage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigastorage Corp and Chenming Mold 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 Chenming Mold Industrial are associated (or correlated) with Gigastorage Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigastorage Corp has no effect on the direction of Chenming Mold i.e., Chenming Mold and Gigastorage Corp go up and down completely randomly.
Pair Corralation between Chenming Mold and Gigastorage Corp
Assuming the 90 days trading horizon Chenming Mold Industrial is expected to under-perform the Gigastorage Corp. In addition to that, Chenming Mold is 1.7 times more volatile than Gigastorage Corp. It trades about -0.12 of its total potential returns per unit of risk. Gigastorage Corp is currently generating about -0.18 per unit of volatility. If you would invest 1,835 in Gigastorage Corp on September 1, 2024 and sell it today you would lose (155.00) from holding Gigastorage Corp or give up 8.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chenming Mold Industrial vs. Gigastorage Corp
Performance |
| Timeline |
| Chenming Mold Industrial |
| Gigastorage Corp |
Chenming Mold and Gigastorage Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chenming Mold and Gigastorage Corp
The main advantage of trading using opposite Chenming Mold and Gigastorage Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chenming Mold position performs unexpectedly, Gigastorage Corp 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 Gigastorage Corp will offset losses from the drop in Gigastorage Corp's long position.The idea behind Chenming Mold Industrial and Gigastorage Corp 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.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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