Correlation Between Cayenne Entertainment and China Airlines
Can any of the company-specific risk be diversified away by investing in both Cayenne Entertainment and China Airlines 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 Cayenne Entertainment and China Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cayenne Entertainment Technology and China Airlines, you can compare the effects of market volatilities on Cayenne Entertainment and China Airlines 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 Cayenne Entertainment with a short position of China Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cayenne Entertainment and China Airlines.
Diversification Opportunities for Cayenne Entertainment and China Airlines
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cayenne and China is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cayenne Entertainment Technolo and China Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Airlines and Cayenne Entertainment 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 Cayenne Entertainment Technology are associated (or correlated) with China Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Airlines has no effect on the direction of Cayenne Entertainment i.e., Cayenne Entertainment and China Airlines go up and down completely randomly.
Pair Corralation between Cayenne Entertainment and China Airlines
Assuming the 90 days trading horizon Cayenne Entertainment is expected to generate 1.64 times less return on investment than China Airlines. In addition to that, Cayenne Entertainment is 1.4 times more volatile than China Airlines. It trades about 0.06 of its total potential returns per unit of risk. China Airlines is currently generating about 0.14 per unit of volatility. If you would invest 2,270 in China Airlines on October 26, 2024 and sell it today you would earn a total of 330.00 from holding China Airlines or generate 14.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cayenne Entertainment Technolo vs. China Airlines
Performance |
| Timeline |
| Cayenne Entertainment |
| China Airlines |
Cayenne Entertainment and China Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cayenne Entertainment and China Airlines
The main advantage of trading using opposite Cayenne Entertainment and China Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cayenne Entertainment position performs unexpectedly, China Airlines 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 China Airlines will offset losses from the drop in China Airlines' long position.| Cayenne Entertainment vs. China Airlines | Cayenne Entertainment vs. Simplo Technology Co | Cayenne Entertainment vs. Voltronic Power Technology | Cayenne Entertainment vs. Nova Technology |
| China Airlines vs. Eva Airways Corp | China Airlines vs. Evergreen Marine Corp | China Airlines vs. Yang Ming Marine | China Airlines vs. China Steel 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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