Correlation Between CHINA EDUCATION and Caltagirone SpA
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and Caltagirone SpA 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 Caltagirone SpA 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 Caltagirone SpA, you can compare the effects of market volatilities on CHINA EDUCATION and Caltagirone SpA 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 Caltagirone SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Caltagirone SpA.
Diversification Opportunities for CHINA EDUCATION and Caltagirone SpA
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and Caltagirone is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and Caltagirone SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caltagirone SpA 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 Caltagirone SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caltagirone SpA has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and Caltagirone SpA go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Caltagirone SpA
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Caltagirone SpA. But the stock apears to be less risky and, when comparing its historical volatility, CHINA EDUCATION GROUP is 1.46 times less risky than Caltagirone SpA. The stock trades about -0.02 of its potential returns per unit of risk. The Caltagirone SpA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 574.00 in Caltagirone SpA on September 14, 2024 and sell it today you would earn a total of 34.00 from holding Caltagirone SpA or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Caltagirone SpA
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Caltagirone SpA |
CHINA EDUCATION and Caltagirone SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Caltagirone SpA
The main advantage of trading using opposite CHINA EDUCATION and Caltagirone SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, Caltagirone SpA 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 Caltagirone SpA will offset losses from the drop in Caltagirone SpA's long position.| CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc |
| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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