Correlation Between China Clean and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both China Clean and Advanced Micro 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 Clean and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Clean Energy and Advanced Micro Devices, you can compare the effects of market volatilities on China Clean and Advanced Micro 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 Clean with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Clean and Advanced Micro.
Diversification Opportunities for China Clean and Advanced Micro
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Advanced is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Clean Energy and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and China Clean 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 Clean Energy are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of China Clean i.e., China Clean and Advanced Micro go up and down completely randomly.
Pair Corralation between China Clean and Advanced Micro
If you would invest 0.01 in China Clean Energy on September 3, 2024 and sell it today you would earn a total of 0.00 from holding China Clean Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
China Clean Energy vs. Advanced Micro Devices
Performance |
| Timeline |
| China Clean Energy |
| Advanced Micro Devices |
China Clean and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Clean and Advanced Micro
The main advantage of trading using opposite China Clean and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Clean position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| China Clean vs. Sherwin Williams Co | China Clean vs. Air Liquide SA | China Clean vs. LAir Liquide SA | China Clean vs. Air Products and |
| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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