Correlation Between Canlan Ice and Diguang Intl
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Diguang Intl 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 Canlan Ice and Diguang Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Diguang Intl Dev, you can compare the effects of market volatilities on Canlan Ice and Diguang Intl 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 Canlan Ice with a short position of Diguang Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Diguang Intl.
Diversification Opportunities for Canlan Ice and Diguang Intl
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canlan and Diguang is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Diguang Intl Dev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diguang Intl Dev and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with Diguang Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diguang Intl Dev has no effect on the direction of Canlan Ice i.e., Canlan Ice and Diguang Intl go up and down completely randomly.
Pair Corralation between Canlan Ice and Diguang Intl
Assuming the 90 days horizon Canlan Ice is expected to generate 355.71 times less return on investment than Diguang Intl. But when comparing it to its historical volatility, Canlan Ice Sports is 614.64 times less risky than Diguang Intl. It trades about 0.15 of its potential returns per unit of risk. Diguang Intl Dev is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.22 in Diguang Intl Dev on September 12, 2024 and sell it today you would lose (0.13) from holding Diguang Intl Dev or give up 59.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
Canlan Ice Sports vs. Diguang Intl Dev
Performance |
| Timeline |
| Canlan Ice Sports |
| Diguang Intl Dev |
Canlan Ice and Diguang Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Diguang Intl
The main advantage of trading using opposite Canlan Ice and Diguang Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Diguang Intl 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 Diguang Intl will offset losses from the drop in Diguang Intl's long position.| Canlan Ice vs. Oriental Land Co | Canlan Ice vs. Oriental Land Co | Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. ANTA Sports Products |
| Diguang Intl vs. Funko Inc | Diguang Intl vs. Canlan Ice Sports | Diguang Intl vs. Playa Hotels Resorts | Diguang Intl vs. WiMi Hologram Cloud |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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