Correlation Between Allied Machinery and China Everbright
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By analyzing existing cross correlation between Allied Machinery Co and China Everbright Bank, you can compare the effects of market volatilities on Allied Machinery and China Everbright 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 Allied Machinery with a short position of China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and China Everbright.
Diversification Opportunities for Allied Machinery and China Everbright
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allied and China is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank and Allied Machinery 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 Allied Machinery Co are associated (or correlated) with China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of Allied Machinery i.e., Allied Machinery and China Everbright go up and down completely randomly.
Pair Corralation between Allied Machinery and China Everbright
Assuming the 90 days trading horizon Allied Machinery is expected to generate 4.0 times less return on investment than China Everbright. In addition to that, Allied Machinery is 2.02 times more volatile than China Everbright Bank. It trades about 0.01 of its total potential returns per unit of risk. China Everbright Bank is currently generating about 0.08 per unit of volatility. If you would invest 285.00 in China Everbright Bank on September 12, 2024 and sell it today you would earn a total of 84.00 from holding China Everbright Bank or generate 29.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Machinery Co vs. China Everbright Bank
Performance |
| Timeline |
| Allied Machinery |
| China Everbright Bank |
Allied Machinery and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and China Everbright
The main advantage of trading using opposite Allied Machinery and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery position performs unexpectedly, China Everbright 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 Everbright will offset losses from the drop in China Everbright's long position.| Allied Machinery vs. Peoples Insurance of | Allied Machinery vs. Nanxing Furniture Machinery | Allied Machinery vs. Oppein Home Group | Allied Machinery vs. Bus Online Co |
| China Everbright vs. Eastroc Beverage Group | China Everbright vs. HaiXin Foods Co | China Everbright vs. Qingdao Foods Co | China Everbright vs. Shanghai Ziyan Foods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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