Correlation Between China Clean and Origin Materials
Can any of the company-specific risk be diversified away by investing in both China Clean and Origin Materials 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 Origin Materials 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 Origin Materials, you can compare the effects of market volatilities on China Clean and Origin Materials 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 Origin Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Clean and Origin Materials.
Diversification Opportunities for China Clean and Origin Materials
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Origin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Clean Energy and Origin Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Materials 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 Origin Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Materials has no effect on the direction of China Clean i.e., China Clean and Origin Materials go up and down completely randomly.
Pair Corralation between China Clean and Origin Materials
If you would invest 0.01 in China Clean Energy on August 28, 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 | 100.0% |
| Values | Daily Returns |
China Clean Energy vs. Origin Materials
Performance |
| Timeline |
| China Clean Energy |
| Origin Materials |
China Clean and Origin Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Clean and Origin Materials
The main advantage of trading using opposite China Clean and Origin Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Clean position performs unexpectedly, Origin Materials 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 Origin Materials will offset losses from the drop in Origin Materials' long position.| China Clean vs. First Graphene | China Clean vs. HUMANA INC | China Clean vs. Aquagold International | China Clean vs. Barloworld Ltd ADR |
| Origin Materials vs. Tronox Holdings PLC | Origin Materials vs. Valhi Inc | Origin Materials vs. Lsb Industries | Origin Materials vs. Huntsman |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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