Correlation Between Superior Plus and CHINA FORTUNE
Can any of the company-specific risk be diversified away by investing in both Superior Plus and CHINA FORTUNE 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 Superior Plus and CHINA FORTUNE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and CHINA FORTUNE HLDGHD001, you can compare the effects of market volatilities on Superior Plus and CHINA FORTUNE 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 Superior Plus with a short position of CHINA FORTUNE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and CHINA FORTUNE.
Diversification Opportunities for Superior Plus and CHINA FORTUNE
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and CHINA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and CHINA FORTUNE HLDGHD001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA FORTUNE HLDGHD001 and Superior Plus 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 Superior Plus Corp are associated (or correlated) with CHINA FORTUNE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA FORTUNE HLDGHD001 has no effect on the direction of Superior Plus i.e., Superior Plus and CHINA FORTUNE go up and down completely randomly.
Pair Corralation between Superior Plus and CHINA FORTUNE
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the CHINA FORTUNE. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 38.32 times less risky than CHINA FORTUNE. The stock trades about -0.02 of its potential returns per unit of risk. The CHINA FORTUNE HLDGHD001 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.45 in CHINA FORTUNE HLDGHD001 on September 14, 2024 and sell it today you would lose (0.60) from holding CHINA FORTUNE HLDGHD001 or give up 41.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. CHINA FORTUNE HLDGHD001
Performance |
| Timeline |
| Superior Plus Corp |
| CHINA FORTUNE HLDGHD001 |
Superior Plus and CHINA FORTUNE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and CHINA FORTUNE
The main advantage of trading using opposite Superior Plus and CHINA FORTUNE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, CHINA FORTUNE 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 FORTUNE will offset losses from the drop in CHINA FORTUNE's long position.| Superior Plus vs. Boiron SA | Superior Plus vs. COSMOSTEEL HLDGS | Superior Plus vs. Vastned Retail NV | Superior Plus vs. BURLINGTON STORES |
| CHINA FORTUNE vs. Samsung Electronics Co | CHINA FORTUNE vs. Sony Group | CHINA FORTUNE vs. Superior Plus Corp | CHINA FORTUNE vs. SIVERS SEMICONDUCTORS AB |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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