Correlation Between Caihong Display and Suzhou TAA
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By analyzing existing cross correlation between Caihong Display Devices and Suzhou TAA Ultra, you can compare the effects of market volatilities on Caihong Display and Suzhou TAA 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 Suzhou TAA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Suzhou TAA.
Diversification Opportunities for Caihong Display and Suzhou TAA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caihong and Suzhou is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Suzhou TAA Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou TAA Ultra 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 Suzhou TAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou TAA Ultra has no effect on the direction of Caihong Display i.e., Caihong Display and Suzhou TAA go up and down completely randomly.
Pair Corralation between Caihong Display and Suzhou TAA
Assuming the 90 days trading horizon Caihong Display is expected to generate 84.14 times less return on investment than Suzhou TAA. In addition to that, Caihong Display is 1.78 times more volatile than Suzhou TAA Ultra. It trades about 0.0 of its total potential returns per unit of risk. Suzhou TAA Ultra is currently generating about 0.71 per unit of volatility. If you would invest 2,183 in Suzhou TAA Ultra on November 9, 2024 and sell it today you would earn a total of 54.00 from holding Suzhou TAA Ultra or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 12.5% |
| Values | Daily Returns |
Caihong Display Devices vs. Suzhou TAA Ultra
Performance |
| Timeline |
| Caihong Display Devices |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| Suzhou TAA Ultra |
Risk-Adjusted Performance
Excellent
Weak | Strong |
Caihong Display and Suzhou TAA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Suzhou TAA
The main advantage of trading using opposite Caihong Display and Suzhou TAA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Suzhou TAA 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 Suzhou TAA will offset losses from the drop in Suzhou TAA's long position.The idea behind Caihong Display Devices and Suzhou TAA Ultra 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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