Correlation Between Chinese Gamer and Fortune Information
Can any of the company-specific risk be diversified away by investing in both Chinese Gamer and Fortune Information 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 Chinese Gamer and Fortune Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Gamer International and Fortune Information Systems, you can compare the effects of market volatilities on Chinese Gamer and Fortune Information 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 Chinese Gamer with a short position of Fortune Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and Fortune Information.
Diversification Opportunities for Chinese Gamer and Fortune Information
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chinese and Fortune is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and Fortune Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Information and Chinese Gamer 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 Chinese Gamer International are associated (or correlated) with Fortune Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Information has no effect on the direction of Chinese Gamer i.e., Chinese Gamer and Fortune Information go up and down completely randomly.
Pair Corralation between Chinese Gamer and Fortune Information
Assuming the 90 days trading horizon Chinese Gamer International is expected to generate 1.05 times more return on investment than Fortune Information. However, Chinese Gamer is 1.05 times more volatile than Fortune Information Systems. It trades about -0.15 of its potential returns per unit of risk. Fortune Information Systems is currently generating about -0.38 per unit of risk. If you would invest 4,625 in Chinese Gamer International on August 31, 2024 and sell it today you would lose (190.00) from holding Chinese Gamer International or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Gamer International vs. Fortune Information Systems
Performance |
| Timeline |
| Chinese Gamer Intern |
| Fortune Information |
Chinese Gamer and Fortune Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Gamer and Fortune Information
The main advantage of trading using opposite Chinese Gamer and Fortune Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Gamer position performs unexpectedly, Fortune Information 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 Fortune Information will offset losses from the drop in Fortune Information's long position.| Chinese Gamer vs. Grand Pacific Petrochemical | Chinese Gamer vs. Silicon Power Computer | Chinese Gamer vs. Evermore Chemical Industry | Chinese Gamer vs. Chung Hwa Food |
| Fortune Information vs. United Microelectronics | Fortune Information vs. Winbond Electronics Corp | Fortune Information vs. Macronix International 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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