Correlation Between China New and Green Planet
Can any of the company-specific risk be diversified away by investing in both China New and Green Planet 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 New and Green Planet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China New Energy and Green Planet Bio, you can compare the effects of market volatilities on China New and Green Planet 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 New with a short position of Green Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of China New and Green Planet.
Diversification Opportunities for China New and Green Planet
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Green is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding China New Energy and Green Planet Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Planet Bio and China New 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 New Energy are associated (or correlated) with Green Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Planet Bio has no effect on the direction of China New i.e., China New and Green Planet go up and down completely randomly.
Pair Corralation between China New and Green Planet
If you would invest 0.30 in China New Energy on August 29, 2024 and sell it today you would earn a total of 0.50 from holding China New Energy or generate 166.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
China New Energy vs. Green Planet Bio
Performance |
| Timeline |
| China New Energy |
| Green Planet Bio |
China New and Green Planet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China New and Green Planet
The main advantage of trading using opposite China New and Green Planet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China New position performs unexpectedly, Green Planet 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 Green Planet will offset losses from the drop in Green Planet's long position.| China New vs. Green Planet Bio | China New vs. Azure Holding Group | China New vs. Four Leaf Acquisition | China New vs. Opus Magnum Ameris |
| Green Planet vs. EDP Energias | Green Planet vs. CP ALL Public | Green Planet vs. Niagara Mohawk Power | Green Planet vs. The Siam Cement |
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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