Correlation Between Chahua Modern and INKON Life
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By analyzing existing cross correlation between Chahua Modern Housewares and INKON Life Technology, you can compare the effects of market volatilities on Chahua Modern and INKON Life 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 Chahua Modern with a short position of INKON Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and INKON Life.
Diversification Opportunities for Chahua Modern and INKON Life
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chahua and INKON is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares and INKON Life Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INKON Life Technology and Chahua Modern 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 Chahua Modern Housewares are associated (or correlated) with INKON Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INKON Life Technology has no effect on the direction of Chahua Modern i.e., Chahua Modern and INKON Life go up and down completely randomly.
Pair Corralation between Chahua Modern and INKON Life
Assuming the 90 days trading horizon Chahua Modern Housewares is expected to generate 1.79 times more return on investment than INKON Life. However, Chahua Modern is 1.79 times more volatile than INKON Life Technology. It trades about 0.12 of its potential returns per unit of risk. INKON Life Technology is currently generating about -0.11 per unit of risk. If you would invest 2,082 in Chahua Modern Housewares on September 29, 2024 and sell it today you would earn a total of 157.00 from holding Chahua Modern Housewares or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chahua Modern Housewares vs. INKON Life Technology
Performance |
| Timeline |
| Chahua Modern Housewares |
| INKON Life Technology |
Chahua Modern and INKON Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chahua Modern and INKON Life
The main advantage of trading using opposite Chahua Modern and INKON Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern position performs unexpectedly, INKON Life 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 INKON Life will offset losses from the drop in INKON Life's long position.| Chahua Modern vs. China Petroleum Chemical | Chahua Modern vs. PetroChina Co Ltd | Chahua Modern vs. China State Construction | Chahua Modern vs. China Railway Group |
| INKON Life vs. Cultural Investment Holdings | INKON Life vs. Gome Telecom Equipment | INKON Life vs. Bus Online Co | INKON Life vs. Holitech Technology Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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