Correlation Between VARIOUS EATERIES and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and CHINA HUARONG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VARIOUS EATERIES and CHINA HUARONG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on VARIOUS EATERIES and CHINA HUARONG 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 VARIOUS EATERIES with a short position of CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and CHINA HUARONG.
Diversification Opportunities for VARIOUS EATERIES and CHINA HUARONG
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VARIOUS and CHINA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and CHINA HUARONG go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and CHINA HUARONG
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the CHINA HUARONG. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 16.43 times less risky than CHINA HUARONG. The stock trades about -0.04 of its potential returns per unit of risk. The CHINA HUARONG ENERHD 50 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.55 in CHINA HUARONG ENERHD 50 on September 24, 2024 and sell it today you would lose (0.40) from holding CHINA HUARONG ENERHD 50 or give up 72.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| VARIOUS EATERIES |
| CHINA HUARONG ENERHD |
VARIOUS EATERIES and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and CHINA HUARONG
The main advantage of trading using opposite VARIOUS EATERIES and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, CHINA HUARONG 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 HUARONG will offset losses from the drop in CHINA HUARONG's long position.| VARIOUS EATERIES vs. PSI Software AG | VARIOUS EATERIES vs. Aegean Airlines SA | VARIOUS EATERIES vs. CyberArk Software | VARIOUS EATERIES vs. AXWAY SOFTWARE EO |
| CHINA HUARONG vs. Alibaba Group Holding | CHINA HUARONG vs. ConocoPhillips | CHINA HUARONG vs. CNOOC | CHINA HUARONG vs. EOG Resources |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |