Correlation Between Cambricon Technologies and ButOne Information
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By analyzing existing cross correlation between Cambricon Technologies Corp and ButOne Information Corp, you can compare the effects of market volatilities on Cambricon Technologies and ButOne Information 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 Cambricon Technologies with a short position of ButOne Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambricon Technologies and ButOne Information.
Diversification Opportunities for Cambricon Technologies and ButOne Information
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cambricon and ButOne is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cambricon Technologies Corp and ButOne Information Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ButOne Information Corp and Cambricon Technologies 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 Cambricon Technologies Corp are associated (or correlated) with ButOne Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ButOne Information Corp has no effect on the direction of Cambricon Technologies i.e., Cambricon Technologies and ButOne Information go up and down completely randomly.
Pair Corralation between Cambricon Technologies and ButOne Information
Assuming the 90 days trading horizon Cambricon Technologies Corp is expected to generate 1.54 times more return on investment than ButOne Information. However, Cambricon Technologies is 1.54 times more volatile than ButOne Information Corp. It trades about 0.18 of its potential returns per unit of risk. ButOne Information Corp is currently generating about 0.05 per unit of risk. If you would invest 15,897 in Cambricon Technologies Corp on September 3, 2024 and sell it today you would earn a total of 40,203 from holding Cambricon Technologies Corp or generate 252.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambricon Technologies Corp vs. ButOne Information Corp
Performance |
| Timeline |
| Cambricon Technologies |
| ButOne Information Corp |
Cambricon Technologies and ButOne Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambricon Technologies and ButOne Information
The main advantage of trading using opposite Cambricon Technologies and ButOne Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambricon Technologies position performs unexpectedly, ButOne Information 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 ButOne Information will offset losses from the drop in ButOne Information's long position.The idea behind Cambricon Technologies Corp and ButOne Information Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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