Correlation Between Chongqing Machinery and Las Vegas
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery and Las Vegas 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 Las Vegas 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 Las Vegas Sands, you can compare the effects of market volatilities on Chongqing Machinery and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and Las Vegas.
Diversification Opportunities for Chongqing Machinery and Las Vegas
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Las is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of Chongqing Machinery i.e., Chongqing Machinery and Las Vegas go up and down completely randomly.
Pair Corralation between Chongqing Machinery and Las Vegas
Assuming the 90 days horizon Chongqing Machinery is expected to generate 2.15 times less return on investment than Las Vegas. In addition to that, Chongqing Machinery is 1.29 times more volatile than Las Vegas Sands. It trades about 0.07 of its total potential returns per unit of risk. Las Vegas Sands is currently generating about 0.2 per unit of volatility. If you would invest 4,676 in Las Vegas Sands on September 3, 2024 and sell it today you would earn a total of 321.00 from holding Las Vegas Sands or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. Las Vegas Sands
Performance |
| Timeline |
| Chongqing Machinery |
| Las Vegas Sands |
Chongqing Machinery and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and Las Vegas
The main advantage of trading using opposite Chongqing Machinery and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' long position.| Chongqing Machinery vs. Geely Automobile Holdings | Chongqing Machinery vs. TOWNSQUARE MEDIA INC | Chongqing Machinery vs. JD SPORTS FASH | Chongqing Machinery vs. XLMedia PLC |
| Las Vegas vs. Hanison Construction Holdings | Las Vegas vs. WIMFARM SA EO | Las Vegas vs. SBI Insurance Group | Las Vegas vs. Chongqing Machinery Electric |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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