Correlation Between Chiba Bank and Ming Le
Can any of the company-specific risk be diversified away by investing in both Chiba Bank and Ming Le 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 Chiba Bank and Ming Le into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank and Ming Le Sports, you can compare the effects of market volatilities on Chiba Bank and Ming Le 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 Chiba Bank with a short position of Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Ming Le.
Diversification Opportunities for Chiba Bank and Ming Le
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chiba and Ming is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports and Chiba Bank 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 Chiba Bank are associated (or correlated) with Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Chiba Bank i.e., Chiba Bank and Ming Le go up and down completely randomly.
Pair Corralation between Chiba Bank and Ming Le
Assuming the 90 days horizon Chiba Bank is expected to generate 1.76 times more return on investment than Ming Le. However, Chiba Bank is 1.76 times more volatile than Ming Le Sports. It trades about 0.09 of its potential returns per unit of risk. Ming Le Sports is currently generating about -0.21 per unit of risk. If you would invest 835.00 in Chiba Bank on December 13, 2024 and sell it today you would earn a total of 25.00 from holding Chiba Bank or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiba Bank vs. Ming Le Sports
Performance |
| Timeline |
| Chiba Bank |
| Ming Le Sports |
Chiba Bank and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and Ming Le
The main advantage of trading using opposite Chiba Bank and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.| Chiba Bank vs. Ribbon Communications | Chiba Bank vs. QINGCI GAMES INC | Chiba Bank vs. Iridium Communications | Chiba Bank vs. Universal Display |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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