Correlation Between Bannerman Resources and Chongqing Machinery
Can any of the company-specific risk be diversified away by investing in both Bannerman Resources and Chongqing Machinery 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 Bannerman Resources and Chongqing Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bannerman Resources Limited and Chongqing Machinery Electric, you can compare the effects of market volatilities on Bannerman Resources and Chongqing Machinery 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 Bannerman Resources with a short position of Chongqing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bannerman Resources and Chongqing Machinery.
Diversification Opportunities for Bannerman Resources and Chongqing Machinery
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bannerman and Chongqing is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bannerman Resources Limited and Chongqing Machinery Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Machinery and Bannerman Resources 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 Bannerman Resources Limited are associated (or correlated) with Chongqing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Machinery has no effect on the direction of Bannerman Resources i.e., Bannerman Resources and Chongqing Machinery go up and down completely randomly.
Pair Corralation between Bannerman Resources and Chongqing Machinery
Assuming the 90 days horizon Bannerman Resources Limited is expected to generate 0.68 times more return on investment than Chongqing Machinery. However, Bannerman Resources Limited is 1.46 times less risky than Chongqing Machinery. It trades about 0.05 of its potential returns per unit of risk. Chongqing Machinery Electric is currently generating about -0.01 per unit of risk. If you would invest 172.00 in Bannerman Resources Limited on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Bannerman Resources Limited or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bannerman Resources Limited vs. Chongqing Machinery Electric
Performance |
| Timeline |
| Bannerman Resources |
| Chongqing Machinery |
Bannerman Resources and Chongqing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bannerman Resources and Chongqing Machinery
The main advantage of trading using opposite Bannerman Resources and Chongqing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bannerman Resources position performs unexpectedly, Chongqing Machinery 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 Chongqing Machinery will offset losses from the drop in Chongqing Machinery's long position.| Bannerman Resources vs. G III APPAREL GROUP | Bannerman Resources vs. Television Broadcasts Limited | Bannerman Resources vs. Nishi Nippon Railroad Co | Bannerman Resources vs. GBS Software AG |
| Chongqing Machinery vs. Samsung Electronics Co | Chongqing Machinery vs. STORE ELECTRONIC | Chongqing Machinery vs. Endeavour Mining PLC | Chongqing Machinery vs. STMicroelectronics NV |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |