Correlation Between Channel Well and Scan D
Can any of the company-specific risk be diversified away by investing in both Channel Well and Scan D 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 Channel Well and Scan D into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Channel Well Technology and Scan D, you can compare the effects of market volatilities on Channel Well and Scan D 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 Channel Well with a short position of Scan D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Channel Well and Scan D.
Diversification Opportunities for Channel Well and Scan D
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Channel and Scan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Channel Well Technology and Scan D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scan D and Channel Well 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 Channel Well Technology are associated (or correlated) with Scan D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scan D has no effect on the direction of Channel Well i.e., Channel Well and Scan D go up and down completely randomly.
Pair Corralation between Channel Well and Scan D
Assuming the 90 days trading horizon Channel Well Technology is expected to under-perform the Scan D. In addition to that, Channel Well is 1.27 times more volatile than Scan D. It trades about -0.1 of its total potential returns per unit of risk. Scan D is currently generating about 0.17 per unit of volatility. If you would invest 3,255 in Scan D on December 11, 2024 and sell it today you would earn a total of 165.00 from holding Scan D or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Channel Well Technology vs. Scan D
Performance |
| Timeline |
| Channel Well Technology |
| Scan D |
Channel Well and Scan D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Channel Well and Scan D
The main advantage of trading using opposite Channel Well and Scan D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Channel Well position performs unexpectedly, Scan D 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 Scan D will offset losses from the drop in Scan D's long position.| Channel Well vs. Topco Scientific Co | Channel Well vs. Asia Vital Components | Channel Well vs. Ardentec | Channel Well vs. Adata Technology Co |
| Scan D vs. Oceanic Beverages Co | Scan D vs. Sunmax Biotechnology Co | Scan D vs. Hunya Foods Co | Scan D vs. Central Reinsurance 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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