Correlation Between Industrial and Digital China
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By analyzing existing cross correlation between Industrial and Commercial and Digital China Information, you can compare the effects of market volatilities on Industrial and Digital China 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 Industrial with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Digital China.
Diversification Opportunities for Industrial and Digital China
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Digital is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and Industrial 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 Industrial and Commercial are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of Industrial i.e., Industrial and Digital China go up and down completely randomly.
Pair Corralation between Industrial and Digital China
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.37 times more return on investment than Digital China. However, Industrial and Commercial is 2.72 times less risky than Digital China. It trades about 0.19 of its potential returns per unit of risk. Digital China Information is currently generating about -0.05 per unit of risk. If you would invest 615.00 in Industrial and Commercial on October 30, 2024 and sell it today you would earn a total of 67.00 from holding Industrial and Commercial or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Digital China Information
Performance |
| Timeline |
| Industrial and Commercial |
| Digital China Information |
Industrial and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Digital China
The main advantage of trading using opposite Industrial and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Industrial vs. Nuode Investment Co | Industrial vs. Harbin Hatou Investment | Industrial vs. Yili Chuanning Biotechnology | Industrial vs. China Asset Management |
| Digital China vs. Nanjing Putian Telecommunications | Digital China vs. Guangdong Qunxing Toys | Digital China vs. Quectel Wireless Solutions | Digital China vs. Elite Color Environmental |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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