Correlation Between Chongqing Machinery and AUSTEVOLL SEAFOOD
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD, you can compare the effects of market volatilities on Chongqing Machinery and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and AUSTEVOLL SEAFOOD.
Diversification Opportunities for Chongqing Machinery and AUSTEVOLL SEAFOOD
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chongqing and AUSTEVOLL is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and AUSTEVOLL SEAFOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSTEVOLL SEAFOOD has no effect on the direction of Chongqing Machinery i.e., Chongqing Machinery and AUSTEVOLL SEAFOOD go up and down completely randomly.
Pair Corralation between Chongqing Machinery and AUSTEVOLL SEAFOOD
Assuming the 90 days horizon Chongqing Machinery is expected to generate 1.96 times less return on investment than AUSTEVOLL SEAFOOD. But when comparing it to its historical volatility, Chongqing Machinery Electric is 1.76 times less risky than AUSTEVOLL SEAFOOD. It trades about 0.07 of its potential returns per unit of risk. AUSTEVOLL SEAFOOD is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 283.00 in AUSTEVOLL SEAFOOD on October 17, 2024 and sell it today you would earn a total of 544.00 from holding AUSTEVOLL SEAFOOD or generate 192.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. AUSTEVOLL SEAFOOD
Performance |
| Timeline |
| Chongqing Machinery |
| AUSTEVOLL SEAFOOD |
Chongqing Machinery and AUSTEVOLL SEAFOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and AUSTEVOLL SEAFOOD
The main advantage of trading using opposite Chongqing Machinery and AUSTEVOLL SEAFOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery position performs unexpectedly, AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD will offset losses from the drop in AUSTEVOLL SEAFOOD's long position.| Chongqing Machinery vs. Corporate Office Properties | Chongqing Machinery vs. Grupo Carso SAB | Chongqing Machinery vs. PLAYMATES TOYS | Chongqing Machinery vs. ePlay Digital |
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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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