Correlation Between China Galaxy and Masterwork Machinery
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By analyzing existing cross correlation between China Galaxy Securities and Masterwork Machinery, you can compare the effects of market volatilities on China Galaxy and Masterwork Machinery 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 Galaxy with a short position of Masterwork Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Galaxy and Masterwork Machinery.
Diversification Opportunities for China Galaxy and Masterwork Machinery
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Masterwork is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding China Galaxy Securities and Masterwork Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterwork Machinery and China Galaxy 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 Galaxy Securities are associated (or correlated) with Masterwork Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterwork Machinery has no effect on the direction of China Galaxy i.e., China Galaxy and Masterwork Machinery go up and down completely randomly.
Pair Corralation between China Galaxy and Masterwork Machinery
Assuming the 90 days trading horizon China Galaxy Securities is expected to generate 0.69 times more return on investment than Masterwork Machinery. However, China Galaxy Securities is 1.46 times less risky than Masterwork Machinery. It trades about -0.18 of its potential returns per unit of risk. Masterwork Machinery is currently generating about -0.22 per unit of risk. If you would invest 1,524 in China Galaxy Securities on October 17, 2024 and sell it today you would lose (136.00) from holding China Galaxy Securities or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Galaxy Securities vs. Masterwork Machinery
Performance |
| Timeline |
| China Galaxy Securities |
| Masterwork Machinery |
China Galaxy and Masterwork Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Galaxy and Masterwork Machinery
The main advantage of trading using opposite China Galaxy and Masterwork Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Galaxy position performs unexpectedly, Masterwork Machinery 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 Masterwork Machinery will offset losses from the drop in Masterwork Machinery's long position.| China Galaxy vs. Jinlong Machinery Electronic | China Galaxy vs. Iat Automobile Technology | China Galaxy vs. Huasi Agricultural Development | China Galaxy vs. Masterwork Machinery |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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