Correlation Between CHINA EDUCATION and MC Mining
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and MC Mining 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 CHINA EDUCATION and MC Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and MC Mining, you can compare the effects of market volatilities on CHINA EDUCATION and MC Mining 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 CHINA EDUCATION with a short position of MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and MC Mining.
Diversification Opportunities for CHINA EDUCATION and MC Mining
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CHINA and G1V is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and CHINA EDUCATION 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 CHINA EDUCATION GROUP are associated (or correlated) with MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and MC Mining go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and MC Mining
Assuming the 90 days horizon CHINA EDUCATION is expected to generate 62.71 times less return on investment than MC Mining. But when comparing it to its historical volatility, CHINA EDUCATION GROUP is 23.76 times less risky than MC Mining. It trades about 0.04 of its potential returns per unit of risk. MC Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6.70 in MC Mining on September 12, 2024 and sell it today you would lose (6.55) from holding MC Mining or give up 97.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. MC Mining
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| MC Mining |
CHINA EDUCATION and MC Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and MC Mining
The main advantage of trading using opposite CHINA EDUCATION and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, MC Mining 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 MC Mining will offset losses from the drop in MC Mining's long position.| CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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