Correlation Between China Clean and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both China Clean and NYSE Composite 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 NYSE Composite 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 NYSE Composite, you can compare the effects of market volatilities on China Clean and NYSE Composite 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 NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Clean and NYSE Composite.
Diversification Opportunities for China Clean and NYSE Composite
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and NYSE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Clean Energy and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of China Clean i.e., China Clean and NYSE Composite go up and down completely randomly.
Pair Corralation between China Clean and NYSE Composite
If you would invest 1,553,974 in NYSE Composite on September 27, 2024 and sell it today you would earn a total of 380,174 from holding NYSE Composite or generate 24.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Clean Energy vs. NYSE Composite
Performance |
| Timeline |
China Clean and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
China Clean Energy
Pair trading matchups for China Clean
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with China Clean and NYSE Composite
The main advantage of trading using opposite China Clean and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Clean position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| China Clean vs. Hawkins | China Clean vs. Axalta Coating Systems | China Clean vs. Ecolab Inc | China Clean vs. Edgewell Personal Care |
| NYSE Composite vs. Delek Logistics Partners | NYSE Composite vs. Sun Country Airlines | NYSE Composite vs. China Clean Energy | NYSE Composite vs. Regeneron Pharmaceuticals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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