Correlation Between Caihong Display and Aba Chemicals
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By analyzing existing cross correlation between Caihong Display Devices and Aba Chemicals Corp, you can compare the effects of market volatilities on Caihong Display and Aba Chemicals 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 Caihong Display with a short position of Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Aba Chemicals.
Diversification Opportunities for Caihong Display and Aba Chemicals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caihong and Aba is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of Caihong Display i.e., Caihong Display and Aba Chemicals go up and down completely randomly.
Pair Corralation between Caihong Display and Aba Chemicals
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 0.72 times more return on investment than Aba Chemicals. However, Caihong Display Devices is 1.4 times less risky than Aba Chemicals. It trades about 0.05 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about 0.01 per unit of risk. If you would invest 590.00 in Caihong Display Devices on October 16, 2024 and sell it today you would earn a total of 237.00 from holding Caihong Display Devices or generate 40.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Aba Chemicals Corp
Performance |
| Timeline |
| Caihong Display Devices |
| Aba Chemicals Corp |
Caihong Display and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Aba Chemicals
The main advantage of trading using opposite Caihong Display and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' long position.| Caihong Display vs. Great Sun Foods Co | Caihong Display vs. Vanfund Urban Investment | Caihong Display vs. Zhongrun Resources Investment | Caihong Display vs. Kunwu Jiuding Investment |
| Aba Chemicals vs. Sportsoul Co Ltd | Aba Chemicals vs. Beijing Enlight Media | Aba Chemicals vs. King Strong New Material | Aba Chemicals vs. Hangzhou Gaoxin Rubber |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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