Correlation Between Chongqing Machinery and Allscripts Healthcare
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery and Allscripts Healthcare 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 Chongqing Machinery and Allscripts Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chongqing Machinery Electric and Allscripts Healthcare Solutions, you can compare the effects of market volatilities on Chongqing Machinery and Allscripts Healthcare 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 Chongqing Machinery with a short position of Allscripts Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and Allscripts Healthcare.
Diversification Opportunities for Chongqing Machinery and Allscripts Healthcare
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chongqing and Allscripts is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and Allscripts Healthcare Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allscripts Healthcare and Chongqing Machinery 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 Chongqing Machinery Electric are associated (or correlated) with Allscripts Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allscripts Healthcare has no effect on the direction of Chongqing Machinery i.e., Chongqing Machinery and Allscripts Healthcare go up and down completely randomly.
Pair Corralation between Chongqing Machinery and Allscripts Healthcare
Assuming the 90 days horizon Chongqing Machinery is expected to generate 21.39 times less return on investment than Allscripts Healthcare. But when comparing it to its historical volatility, Chongqing Machinery Electric is 15.09 times less risky than Allscripts Healthcare. It trades about 0.04 of its potential returns per unit of risk. Allscripts Healthcare Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 850.00 in Allscripts Healthcare Solutions on September 14, 2024 and sell it today you would earn a total of 70.00 from holding Allscripts Healthcare Solutions or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. Allscripts Healthcare Solution
Performance |
| Timeline |
| Chongqing Machinery |
| Allscripts Healthcare |
Chongqing Machinery and Allscripts Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and Allscripts Healthcare
The main advantage of trading using opposite Chongqing Machinery and Allscripts Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery position performs unexpectedly, Allscripts Healthcare 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 Allscripts Healthcare will offset losses from the drop in Allscripts Healthcare's long position.| Chongqing Machinery vs. TRAVEL LEISURE DL 01 | Chongqing Machinery vs. Air Transport Services | Chongqing Machinery vs. AIR PRODCHEMICALS | Chongqing Machinery vs. Lifeway Foods |
| Allscripts Healthcare vs. NISSIN FOODS HLDGS | Allscripts Healthcare vs. MCEWEN MINING INC | Allscripts Healthcare vs. EBRO FOODS | Allscripts Healthcare vs. Kaiser Aluminum |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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