Correlation Between BEIJJINGNENG CLERGHYC1 and CHUGOKU EL
Can any of the company-specific risk be diversified away by investing in both BEIJJINGNENG CLERGHYC1 and CHUGOKU EL 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 BEIJJINGNENG CLERGHYC1 and CHUGOKU EL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEIJJINGNENG CLERGHYC1 and CHUGOKU EL PWR, you can compare the effects of market volatilities on BEIJJINGNENG CLERGHYC1 and CHUGOKU EL 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 BEIJJINGNENG CLERGHYC1 with a short position of CHUGOKU EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEIJJINGNENG CLERGHYC1 and CHUGOKU EL.
Diversification Opportunities for BEIJJINGNENG CLERGHYC1 and CHUGOKU EL
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BEIJJINGNENG and CHUGOKU is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BEIJJINGNENG CLERGHYC1 and CHUGOKU EL PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHUGOKU EL PWR and BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 are associated (or correlated) with CHUGOKU EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHUGOKU EL PWR has no effect on the direction of BEIJJINGNENG CLERGHYC1 i.e., BEIJJINGNENG CLERGHYC1 and CHUGOKU EL go up and down completely randomly.
Pair Corralation between BEIJJINGNENG CLERGHYC1 and CHUGOKU EL
Assuming the 90 days horizon BEIJJINGNENG CLERGHYC1 is expected to generate 1.6 times more return on investment than CHUGOKU EL. However, BEIJJINGNENG CLERGHYC1 is 1.6 times more volatile than CHUGOKU EL PWR. It trades about -0.03 of its potential returns per unit of risk. CHUGOKU EL PWR is currently generating about -0.27 per unit of risk. If you would invest 22.00 in BEIJJINGNENG CLERGHYC1 on September 12, 2024 and sell it today you would lose (1.00) from holding BEIJJINGNENG CLERGHYC1 or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BEIJJINGNENG CLERGHYC1 vs. CHUGOKU EL PWR
Performance |
| Timeline |
| BEIJJINGNENG CLERGHYC1 |
| CHUGOKU EL PWR |
BEIJJINGNENG CLERGHYC1 and CHUGOKU EL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEIJJINGNENG CLERGHYC1 and CHUGOKU EL
The main advantage of trading using opposite BEIJJINGNENG CLERGHYC1 and CHUGOKU EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEIJJINGNENG CLERGHYC1 position performs unexpectedly, CHUGOKU EL 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 CHUGOKU EL will offset losses from the drop in CHUGOKU EL's long position.| BEIJJINGNENG CLERGHYC1 vs. VERBUND AG ADR | BEIJJINGNENG CLERGHYC1 vs. TOHOKU EL PWR | BEIJJINGNENG CLERGHYC1 vs. EnviTec Biogas AG | BEIJJINGNENG CLERGHYC1 vs. HOKURIKU EL PWR |
| CHUGOKU EL vs. VERBUND AG ADR | CHUGOKU EL vs. TOHOKU EL PWR | CHUGOKU EL vs. BEIJJINGNENG CLERGHYC1 | CHUGOKU EL vs. EnviTec Biogas AG |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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