Correlation Between Caihong Display and China Satellite
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By analyzing existing cross correlation between Caihong Display Devices and China Satellite Communications, you can compare the effects of market volatilities on Caihong Display and China Satellite 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 China Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and China Satellite.
Diversification Opportunities for Caihong Display and China Satellite
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caihong and China is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and China Satellite Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Satellite Comm 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 China Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Satellite Comm has no effect on the direction of Caihong Display i.e., Caihong Display and China Satellite go up and down completely randomly.
Pair Corralation between Caihong Display and China Satellite
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 0.69 times more return on investment than China Satellite. However, Caihong Display Devices is 1.46 times less risky than China Satellite. It trades about 0.46 of its potential returns per unit of risk. China Satellite Communications is currently generating about -0.03 per unit of risk. If you would invest 695.00 in Caihong Display Devices on September 29, 2024 and sell it today you would earn a total of 143.00 from holding Caihong Display Devices or generate 20.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. China Satellite Communications
Performance |
| Timeline |
| Caihong Display Devices |
| China Satellite Comm |
Caihong Display and China Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and China Satellite
The main advantage of trading using opposite Caihong Display and China Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, China Satellite 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 Satellite will offset losses from the drop in China Satellite's long position.| Caihong Display vs. Industrial and Commercial | Caihong Display vs. China Construction Bank | Caihong Display vs. Agricultural Bank of | Caihong Display vs. Bank of China |
| China Satellite vs. Guangzhou Haige Communications | China Satellite vs. Shuhua Sports Co | China Satellite vs. Fibocom Wireless | China Satellite vs. Caihong Display Devices |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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