Correlation Between Chongqing Machinery and SPORTING
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery and SPORTING 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 SPORTING 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 SPORTING, you can compare the effects of market volatilities on Chongqing Machinery and SPORTING 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 SPORTING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and SPORTING.
Diversification Opportunities for Chongqing Machinery and SPORTING
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and SPORTING is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and SPORTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORTING 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 SPORTING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORTING has no effect on the direction of Chongqing Machinery i.e., Chongqing Machinery and SPORTING go up and down completely randomly.
Pair Corralation between Chongqing Machinery and SPORTING
If you would invest 7.15 in Chongqing Machinery Electric on September 2, 2024 and sell it today you would earn a total of 0.20 from holding Chongqing Machinery Electric or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. SPORTING
Performance |
| Timeline |
| Chongqing Machinery |
| SPORTING |
Chongqing Machinery and SPORTING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and SPORTING
The main advantage of trading using opposite Chongqing Machinery and SPORTING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery position performs unexpectedly, SPORTING 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 SPORTING will offset losses from the drop in SPORTING's long position.| Chongqing Machinery vs. ABB | Chongqing Machinery vs. Emerson Electric Co | Chongqing Machinery vs. Superior Plus Corp | Chongqing Machinery vs. NMI Holdings |
| SPORTING vs. SIVERS SEMICONDUCTORS AB | SPORTING vs. Darden Restaurants | SPORTING vs. Reliance Steel Aluminum | SPORTING vs. Q2M Managementberatung AG |
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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