Correlation Between Chongqing Machinery and ALBIS LEASING
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery and ALBIS LEASING 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 ALBIS LEASING 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 ALBIS LEASING AG, you can compare the effects of market volatilities on Chongqing Machinery and ALBIS LEASING 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 ALBIS LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and ALBIS LEASING.
Diversification Opportunities for Chongqing Machinery and ALBIS LEASING
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and ALBIS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG 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 ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of Chongqing Machinery i.e., Chongqing Machinery and ALBIS LEASING go up and down completely randomly.
Pair Corralation between Chongqing Machinery and ALBIS LEASING
Assuming the 90 days horizon Chongqing Machinery Electric is expected to generate 6.7 times more return on investment than ALBIS LEASING. However, Chongqing Machinery is 6.7 times more volatile than ALBIS LEASING AG. It trades about 0.04 of its potential returns per unit of risk. ALBIS LEASING AG is currently generating about -0.29 per unit of risk. If you would invest 7.35 in Chongqing Machinery Electric on August 29, 2024 and sell it today you would earn a total of 0.10 from holding Chongqing Machinery Electric or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. ALBIS LEASING AG
Performance |
| Timeline |
| Chongqing Machinery |
| ALBIS LEASING AG |
Chongqing Machinery and ALBIS LEASING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and ALBIS LEASING
The main advantage of trading using opposite Chongqing Machinery and ALBIS LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery position performs unexpectedly, ALBIS LEASING 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 ALBIS LEASING will offset losses from the drop in ALBIS LEASING's long position.| Chongqing Machinery vs. Park Hotels Resorts | Chongqing Machinery vs. Materialise NV | Chongqing Machinery vs. InterContinental Hotels Group | Chongqing Machinery vs. Summit Hotel Properties |
| ALBIS LEASING vs. Gol Intelligent Airlines | ALBIS LEASING vs. Mitsui Chemicals | ALBIS LEASING vs. Aegean Airlines SA | ALBIS LEASING vs. SINGAPORE AIRLINES |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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