Correlation Between Integrated Service and Great China
Can any of the company-specific risk be diversified away by investing in both Integrated Service and Great China 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 Integrated Service and Great China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Service Technology and Great China Metal, you can compare the effects of market volatilities on Integrated Service and Great China 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 Integrated Service with a short position of Great China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Service and Great China.
Diversification Opportunities for Integrated Service and Great China
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Integrated and Great is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Service Technology and Great China Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great China Metal and Integrated Service 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 Integrated Service Technology are associated (or correlated) with Great China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great China Metal has no effect on the direction of Integrated Service i.e., Integrated Service and Great China go up and down completely randomly.
Pair Corralation between Integrated Service and Great China
Assuming the 90 days trading horizon Integrated Service Technology is expected to under-perform the Great China. In addition to that, Integrated Service is 5.87 times more volatile than Great China Metal. It trades about -0.47 of its total potential returns per unit of risk. Great China Metal is currently generating about 0.0 per unit of volatility. If you would invest 2,290 in Great China Metal on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Great China Metal or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Service Technology vs. Great China Metal
Performance |
| Timeline |
| Integrated Service |
| Great China Metal |
Integrated Service and Great China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Service and Great China
The main advantage of trading using opposite Integrated Service and Great China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Service position performs unexpectedly, Great China 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 Great China will offset losses from the drop in Great China's long position.| Integrated Service vs. Standard Foods Corp | Integrated Service vs. Sunny Friend Environmental | Integrated Service vs. Wei Chuan Foods | Integrated Service vs. Wei Chih Steel |
| Great China vs. Basso Industry Corp | Great China vs. Chung Hsin Electric Machinery | Great China vs. TYC Brother Industrial | Great China vs. TECO Electric Machinery |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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