Correlation Between Brockhaus Capital and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital and CHINA EDUCATION 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 Brockhaus Capital and CHINA EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Brockhaus Capital and CHINA EDUCATION 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 Brockhaus Capital with a short position of CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and CHINA EDUCATION.
Diversification Opportunities for Brockhaus Capital and CHINA EDUCATION
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brockhaus and CHINA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP and Brockhaus Capital 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 Brockhaus Capital Management are associated (or correlated) with CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Brockhaus Capital i.e., Brockhaus Capital and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Brockhaus Capital and CHINA EDUCATION
Assuming the 90 days trading horizon Brockhaus Capital is expected to generate 1.98 times less return on investment than CHINA EDUCATION. But when comparing it to its historical volatility, Brockhaus Capital Management is 1.66 times less risky than CHINA EDUCATION. It trades about 0.03 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 34.00 in CHINA EDUCATION GROUP on August 27, 2024 and sell it today you would earn a total of 11.00 from holding CHINA EDUCATION GROUP or generate 32.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brockhaus Capital Management vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Brockhaus Capital |
| CHINA EDUCATION GROUP |
Brockhaus Capital and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and CHINA EDUCATION
The main advantage of trading using opposite Brockhaus Capital and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital position performs unexpectedly, CHINA EDUCATION 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 EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| Brockhaus Capital vs. The Bank of | Brockhaus Capital vs. Superior Plus Corp | Brockhaus Capital vs. NMI Holdings | Brockhaus Capital vs. Origin Agritech |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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