Correlation Between China Conch and Umicore SA
Can any of the company-specific risk be diversified away by investing in both China Conch and Umicore SA 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 Conch and Umicore SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Conch Venture and Umicore SA, you can compare the effects of market volatilities on China Conch and Umicore SA 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 Conch with a short position of Umicore SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Conch and Umicore SA.
Diversification Opportunities for China Conch and Umicore SA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Umicore is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Conch Venture and Umicore SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umicore SA and China Conch 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 Conch Venture are associated (or correlated) with Umicore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umicore SA has no effect on the direction of China Conch i.e., China Conch and Umicore SA go up and down completely randomly.
Pair Corralation between China Conch and Umicore SA
Assuming the 90 days horizon China Conch Venture is expected to generate 0.87 times more return on investment than Umicore SA. However, China Conch Venture is 1.16 times less risky than Umicore SA. It trades about 0.12 of its potential returns per unit of risk. Umicore SA is currently generating about -0.08 per unit of risk. If you would invest 49.00 in China Conch Venture on September 2, 2024 and sell it today you would earn a total of 29.00 from holding China Conch Venture or generate 59.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
China Conch Venture vs. Umicore SA
Performance |
| Timeline |
| China Conch Venture |
| Umicore SA |
China Conch and Umicore SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Conch and Umicore SA
The main advantage of trading using opposite China Conch and Umicore SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Conch position performs unexpectedly, Umicore SA 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 Umicore SA will offset losses from the drop in Umicore SA's long position.| China Conch vs. Eestech | China Conch vs. Bion Environmental Technologies | China Conch vs. TOMI Environmental Solutions |
| Umicore SA vs. Eestech | Umicore SA vs. Bion Environmental Technologies | Umicore SA vs. TOMI Environmental Solutions |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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