Correlation Between China Health and Connecticut Light
Can any of the company-specific risk be diversified away by investing in both China Health and Connecticut Light 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 China Health and Connecticut Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Health Industries and The Connecticut Light, you can compare the effects of market volatilities on China Health and Connecticut Light 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 China Health with a short position of Connecticut Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Connecticut Light.
Diversification Opportunities for China Health and Connecticut Light
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Connecticut is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding China Health Industries and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light and China Health 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 China Health Industries are associated (or correlated) with Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of China Health i.e., China Health and Connecticut Light go up and down completely randomly.
Pair Corralation between China Health and Connecticut Light
If you would invest 33.00 in China Health Industries on August 29, 2024 and sell it today you would earn a total of 0.00 from holding China Health Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Health Industries vs. The Connecticut Light
Performance |
| Timeline |
| China Health Industries |
| Connecticut Light |
China Health and Connecticut Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Connecticut Light
The main advantage of trading using opposite China Health and Connecticut Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Connecticut Light 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 Connecticut Light will offset losses from the drop in Connecticut Light's long position.| China Health vs. Usio Inc | China Health vs. ServiceNow | China Health vs. Marine Products | China Health vs. Playa Hotels Resorts |
| Connecticut Light vs. The Connecticut Light | Connecticut Light vs. The Connecticut Light | Connecticut Light vs. PacifiCorp | Connecticut Light vs. Nextera Energy |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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