Correlation Between China Clean and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both China Clean and Western Acquisition 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 Western Acquisition 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 Western Acquisition Ventures, you can compare the effects of market volatilities on China Clean and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Clean and Western Acquisition.
Diversification Opportunities for China Clean and Western Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Clean Energy and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of China Clean i.e., China Clean and Western Acquisition go up and down completely randomly.
Pair Corralation between China Clean and Western Acquisition
If you would invest 0.01 in China Clean Energy on September 13, 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 | 95.45% |
| Values | Daily Returns |
China Clean Energy vs. Western Acquisition Ventures
Performance |
| Timeline |
| China Clean Energy |
| Western Acquisition |
China Clean and Western Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Clean and Western Acquisition
The main advantage of trading using opposite China Clean and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Clean position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition's long position.| China Clean vs. Chemours Co | China Clean vs. International Flavors Fragrances | China Clean vs. Air Products and | China Clean vs. PPG Industries |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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