Correlation Between SBA Communications and Chuangs China
Can any of the company-specific risk be diversified away by investing in both SBA Communications and Chuangs 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 SBA Communications and Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and Chuangs China Investments, you can compare the effects of market volatilities on SBA Communications and Chuangs 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 SBA Communications with a short position of Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and Chuangs China.
Diversification Opportunities for SBA Communications and Chuangs China
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBA and Chuangs is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments and SBA Communications 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 SBA Communications Corp are associated (or correlated) with Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of SBA Communications i.e., SBA Communications and Chuangs China go up and down completely randomly.
Pair Corralation between SBA Communications and Chuangs China
If you would invest 20,542 in SBA Communications Corp on September 14, 2024 and sell it today you would earn a total of 28.00 from holding SBA Communications Corp or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBA Communications Corp vs. Chuangs China Investments
Performance |
| Timeline |
| SBA Communications Corp |
| Chuangs China Investments |
SBA Communications and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and Chuangs China
The main advantage of trading using opposite SBA Communications and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications position performs unexpectedly, Chuangs 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
| Chuangs China vs. Superior Plus Corp | Chuangs China vs. SIVERS SEMICONDUCTORS AB | Chuangs China vs. Reliance Steel Aluminum | Chuangs China vs. CHINA HUARONG ENERHD 50 |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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