Correlation Between Chiba Bank and Chongqing Rural
Can any of the company-specific risk be diversified away by investing in both Chiba Bank and Chongqing Rural 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 Chiba Bank and Chongqing Rural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank Ltd and Chongqing Rural Commercial, you can compare the effects of market volatilities on Chiba Bank and Chongqing Rural 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 Chiba Bank with a short position of Chongqing Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Chongqing Rural.
Diversification Opportunities for Chiba Bank and Chongqing Rural
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chiba and Chongqing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank Ltd and Chongqing Rural Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Rural Comm and Chiba Bank 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 Chiba Bank Ltd are associated (or correlated) with Chongqing Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Rural Comm has no effect on the direction of Chiba Bank i.e., Chiba Bank and Chongqing Rural go up and down completely randomly.
Pair Corralation between Chiba Bank and Chongqing Rural
Assuming the 90 days horizon Chiba Bank is expected to generate 2.86 times less return on investment than Chongqing Rural. But when comparing it to its historical volatility, Chiba Bank Ltd is 2.31 times less risky than Chongqing Rural. It trades about 0.02 of its potential returns per unit of risk. Chongqing Rural Commercial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,538 in Chongqing Rural Commercial on December 10, 2024 and sell it today you would earn a total of 54.00 from holding Chongqing Rural Commercial or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 51.22% |
| Values | Daily Returns |
Chiba Bank Ltd vs. Chongqing Rural Commercial
Performance |
| Timeline |
| Chiba Bank |
| Chongqing Rural Comm |
Chiba Bank and Chongqing Rural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and Chongqing Rural
The main advantage of trading using opposite Chiba Bank and Chongqing Rural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank position performs unexpectedly, Chongqing Rural 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 Chongqing Rural will offset losses from the drop in Chongqing Rural's long position.| Chiba Bank vs. First Hawaiian | Chiba Bank vs. Central Pacific Financial | Chiba Bank vs. Territorial Bancorp | Chiba Bank vs. Comerica |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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