Correlation Between China Health and TravelSky Technology
Can any of the company-specific risk be diversified away by investing in both China Health and TravelSky Technology 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 TravelSky Technology 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 TravelSky Technology Ltd, you can compare the effects of market volatilities on China Health and TravelSky Technology 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 TravelSky Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and TravelSky Technology.
Diversification Opportunities for China Health and TravelSky Technology
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and TravelSky is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding China Health Industries and TravelSky Technology Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TravelSky Technology 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 TravelSky Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TravelSky Technology has no effect on the direction of China Health i.e., China Health and TravelSky Technology go up and down completely randomly.
Pair Corralation between China Health and TravelSky Technology
Given the investment horizon of 90 days China Health Industries is expected to generate 13.92 times more return on investment than TravelSky Technology. However, China Health is 13.92 times more volatile than TravelSky Technology Ltd. It trades about 0.06 of its potential returns per unit of risk. TravelSky Technology Ltd is currently generating about -0.02 per unit of risk. If you would invest 17.00 in China Health Industries on August 24, 2024 and sell it today you would earn a total of 16.00 from holding China Health Industries or generate 94.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Health Industries vs. TravelSky Technology Ltd
Performance |
| Timeline |
| China Health Industries |
| TravelSky Technology |
China Health and TravelSky Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and TravelSky Technology
The main advantage of trading using opposite China Health and TravelSky Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, TravelSky Technology 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 TravelSky Technology will offset losses from the drop in TravelSky Technology's long position.| China Health vs. Embotelladora Andina SA | China Health vs. Signet International Holdings | China Health vs. National Beverage Corp | China Health vs. PT Astra International |
| TravelSky Technology vs. Two Hands Corp | TravelSky Technology vs. Visium Technologies | TravelSky Technology vs. Tautachrome | TravelSky Technology vs. V Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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