Correlation Between China National and Fuda Alloy
Specify exactly 2 symbols:
By analyzing existing cross correlation between China National Software and Fuda Alloy Materials, you can compare the effects of market volatilities on China National and Fuda Alloy 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 China National with a short position of Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and Fuda Alloy.
Diversification Opportunities for China National and Fuda Alloy
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Fuda is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding China National Software and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials and China National 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 China National Software are associated (or correlated) with Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of China National i.e., China National and Fuda Alloy go up and down completely randomly.
Pair Corralation between China National and Fuda Alloy
Assuming the 90 days trading horizon China National is expected to generate 6.36 times less return on investment than Fuda Alloy. But when comparing it to its historical volatility, China National Software is 1.69 times less risky than Fuda Alloy. It trades about 0.1 of its potential returns per unit of risk. Fuda Alloy Materials is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,202 in Fuda Alloy Materials on November 7, 2024 and sell it today you would earn a total of 315.00 from holding Fuda Alloy Materials or generate 26.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China National Software vs. Fuda Alloy Materials
Performance |
| Timeline |
| China National Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fuda Alloy Materials |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
China National and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China National and Fuda Alloy
The main advantage of trading using opposite China National and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy's long position.The idea behind China National Software and Fuda Alloy Materials 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |