Correlation Between Blockchain Industries and China Health
Can any of the company-specific risk be diversified away by investing in both Blockchain Industries and China Health 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 Blockchain Industries and China Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blockchain Industries and China Health Management, you can compare the effects of market volatilities on Blockchain Industries and China Health 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 Blockchain Industries with a short position of China Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blockchain Industries and China Health.
Diversification Opportunities for Blockchain Industries and China Health
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Blockchain and China is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Industries and China Health Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Health Management and Blockchain Industries 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 Blockchain Industries are associated (or correlated) with China Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Health Management has no effect on the direction of Blockchain Industries i.e., Blockchain Industries and China Health go up and down completely randomly.
Pair Corralation between Blockchain Industries and China Health
Given the investment horizon of 90 days Blockchain Industries is expected to generate 1.09 times more return on investment than China Health. However, Blockchain Industries is 1.09 times more volatile than China Health Management. It trades about 0.07 of its potential returns per unit of risk. China Health Management is currently generating about 0.05 per unit of risk. If you would invest 5.30 in Blockchain Industries on September 13, 2024 and sell it today you would lose (2.90) from holding Blockchain Industries or give up 54.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blockchain Industries vs. China Health Management
Performance |
| Timeline |
| Blockchain Industries |
| China Health Management |
Blockchain Industries and China Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blockchain Industries and China Health
The main advantage of trading using opposite Blockchain Industries and China Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockchain Industries position performs unexpectedly, China Health 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 Health will offset losses from the drop in China Health's long position.| Blockchain Industries vs. Alpha One | Blockchain Industries vs. Manaris Corp | Blockchain Industries vs. C2E Energy | Blockchain Industries vs. Tanke Biosciences |
| China Health vs. Deere Company | China Health vs. Caterpillar | China Health vs. Lion Electric Corp | China Health vs. Nikola Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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