Correlation Between Grand Ocean and China Times
Can any of the company-specific risk be diversified away by investing in both Grand Ocean and China Times 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 Grand Ocean and China Times into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Ocean Retail and China Times Publishing, you can compare the effects of market volatilities on Grand Ocean and China Times 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 Grand Ocean with a short position of China Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and China Times.
Diversification Opportunities for Grand Ocean and China Times
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grand and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and China Times Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Times Publishing and Grand Ocean 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 Grand Ocean Retail are associated (or correlated) with China Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Times Publishing has no effect on the direction of Grand Ocean i.e., Grand Ocean and China Times go up and down completely randomly.
Pair Corralation between Grand Ocean and China Times
Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the China Times. But the stock apears to be less risky and, when comparing its historical volatility, Grand Ocean Retail is 1.55 times less risky than China Times. The stock trades about -0.03 of its potential returns per unit of risk. The China Times Publishing is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,967 in China Times Publishing on November 2, 2024 and sell it today you would lose (47.00) from holding China Times Publishing or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Ocean Retail vs. China Times Publishing
Performance |
| Timeline |
| Grand Ocean Retail |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Times Publishing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Grand Ocean and China Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and China Times
The main advantage of trading using opposite Grand Ocean and China Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean position performs unexpectedly, China Times 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 Times will offset losses from the drop in China Times' long position.The idea behind Grand Ocean Retail and China Times Publishing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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