Correlation Between CHINA EDUCATION and ITOCHU
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and ITOCHU 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 ITOCHU 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 ITOCHU, you can compare the effects of market volatilities on CHINA EDUCATION and ITOCHU 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 ITOCHU. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and ITOCHU.
Diversification Opportunities for CHINA EDUCATION and ITOCHU
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHINA and ITOCHU is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU 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 ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and ITOCHU go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and ITOCHU
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to generate 1.69 times more return on investment than ITOCHU. However, CHINA EDUCATION is 1.69 times more volatile than ITOCHU. It trades about -0.18 of its potential returns per unit of risk. ITOCHU is currently generating about -0.49 per unit of risk. If you would invest 42.00 in CHINA EDUCATION GROUP on October 25, 2024 and sell it today you would lose (3.00) from holding CHINA EDUCATION GROUP or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. ITOCHU
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| ITOCHU |
CHINA EDUCATION and ITOCHU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and ITOCHU
The main advantage of trading using opposite CHINA EDUCATION and ITOCHU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, ITOCHU 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 ITOCHU will offset losses from the drop in ITOCHU's long position.| CHINA EDUCATION vs. Nexstar Media Group | CHINA EDUCATION vs. Universal Entertainment | CHINA EDUCATION vs. Ares Management Corp | CHINA EDUCATION vs. RCS MediaGroup SpA |
| ITOCHU vs. SIEM OFFSHORE NEW | ITOCHU vs. DXC Technology Co | ITOCHU vs. Entravision Communications | ITOCHU vs. SCOTT TECHNOLOGY |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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