Correlation Between Cambricon Technologies and Southern PublishingMedia
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By analyzing existing cross correlation between Cambricon Technologies Corp and Southern PublishingMedia Co, you can compare the effects of market volatilities on Cambricon Technologies and Southern PublishingMedia 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 Southern PublishingMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambricon Technologies and Southern PublishingMedia.
Diversification Opportunities for Cambricon Technologies and Southern PublishingMedia
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambricon and Southern is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cambricon Technologies Corp and Southern PublishingMedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern PublishingMedia 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 Southern PublishingMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern PublishingMedia has no effect on the direction of Cambricon Technologies i.e., Cambricon Technologies and Southern PublishingMedia go up and down completely randomly.
Pair Corralation between Cambricon Technologies and Southern PublishingMedia
Assuming the 90 days trading horizon Cambricon Technologies Corp is expected to generate 1.78 times more return on investment than Southern PublishingMedia. However, Cambricon Technologies is 1.78 times more volatile than Southern PublishingMedia Co. It trades about 0.2 of its potential returns per unit of risk. Southern PublishingMedia Co is currently generating about 0.06 per unit of risk. If you would invest 18,010 in Cambricon Technologies Corp on September 3, 2024 and sell it today you would earn a total of 38,190 from holding Cambricon Technologies Corp or generate 212.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambricon Technologies Corp vs. Southern PublishingMedia Co
Performance |
| Timeline |
| Cambricon Technologies |
| Southern PublishingMedia |
Cambricon Technologies and Southern PublishingMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambricon Technologies and Southern PublishingMedia
The main advantage of trading using opposite Cambricon Technologies and Southern PublishingMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambricon Technologies position performs unexpectedly, Southern PublishingMedia 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 Southern PublishingMedia will offset losses from the drop in Southern PublishingMedia's long position.The idea behind Cambricon Technologies Corp and Southern PublishingMedia Co 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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