Correlation Between GreenTech Environmental and Cambricon Technologies
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By analyzing existing cross correlation between GreenTech Environmental Co and Cambricon Technologies Corp, you can compare the effects of market volatilities on GreenTech Environmental and Cambricon Technologies 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 GreenTech Environmental with a short position of Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTech Environmental and Cambricon Technologies.
Diversification Opportunities for GreenTech Environmental and Cambricon Technologies
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GreenTech and Cambricon is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding GreenTech Environmental Co and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies and GreenTech Environmental 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 GreenTech Environmental Co are associated (or correlated) with Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of GreenTech Environmental i.e., GreenTech Environmental and Cambricon Technologies go up and down completely randomly.
Pair Corralation between GreenTech Environmental and Cambricon Technologies
Assuming the 90 days trading horizon GreenTech Environmental is expected to generate 1.34 times less return on investment than Cambricon Technologies. But when comparing it to its historical volatility, GreenTech Environmental Co is 1.03 times less risky than Cambricon Technologies. It trades about 0.15 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 44,525 in Cambricon Technologies Corp on August 31, 2024 and sell it today you would earn a total of 10,078 from holding Cambricon Technologies Corp or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTech Environmental Co vs. Cambricon Technologies Corp
Performance |
| Timeline |
| GreenTech Environmental |
| Cambricon Technologies |
GreenTech Environmental and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTech Environmental and Cambricon Technologies
The main advantage of trading using opposite GreenTech Environmental and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTech Environmental position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.The idea behind GreenTech Environmental Co and Cambricon Technologies 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.
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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