Correlation Between Chinese Gamer and Newretail
Can any of the company-specific risk be diversified away by investing in both Chinese Gamer and Newretail 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 Newretail 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 Newretail Co, you can compare the effects of market volatilities on Chinese Gamer and Newretail 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 Newretail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and Newretail.
Diversification Opportunities for Chinese Gamer and Newretail
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chinese and Newretail is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and Newretail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newretail 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 Newretail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newretail has no effect on the direction of Chinese Gamer i.e., Chinese Gamer and Newretail go up and down completely randomly.
Pair Corralation between Chinese Gamer and Newretail
Assuming the 90 days trading horizon Chinese Gamer International is expected to under-perform the Newretail. But the stock apears to be less risky and, when comparing its historical volatility, Chinese Gamer International is 4.4 times less risky than Newretail. The stock trades about -0.09 of its potential returns per unit of risk. The Newretail Co is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,040 in Newretail Co on August 28, 2024 and sell it today you would earn a total of 530.00 from holding Newretail Co or generate 25.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Gamer International vs. Newretail Co
Performance |
| Timeline |
| Chinese Gamer Intern |
| Newretail |
Chinese Gamer and Newretail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Gamer and Newretail
The main advantage of trading using opposite Chinese Gamer and Newretail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Gamer position performs unexpectedly, Newretail 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 Newretail will offset losses from the drop in Newretail's long position.| Chinese Gamer vs. YuantaP shares Taiwan Electronics | Chinese Gamer vs. YuantaP shares Taiwan Mid Cap | Chinese Gamer vs. Fubon MSCI Taiwan | Chinese Gamer vs. YuantaP shares Taiwan Top |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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