Correlation Between China Power and China Sun
Can any of the company-specific risk be diversified away by investing in both China Power and China Sun 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 Power and China Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Power Equipment and China Sun Grp, you can compare the effects of market volatilities on China Power and China Sun 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 Power with a short position of China Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Power and China Sun.
Diversification Opportunities for China Power and China Sun
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Power Equipment and China Sun Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Sun Grp and China Power 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 Power Equipment are associated (or correlated) with China Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Sun Grp has no effect on the direction of China Power i.e., China Power and China Sun go up and down completely randomly.
Pair Corralation between China Power and China Sun
If you would invest 0.10 in China Sun Grp on September 3, 2024 and sell it today you would lose (0.10) from holding China Sun Grp or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Power Equipment vs. China Sun Grp
Performance |
| Timeline |
| China Power Equipment |
| China Sun Grp |
China Power and China Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Power and China Sun
The main advantage of trading using opposite China Power and China Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Power position performs unexpectedly, China Sun 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 China Sun will offset losses from the drop in China Sun's long position.| China Power vs. KULR Technology Group | China Power vs. Ouster Inc | China Power vs. MicroCloud Hologram | China Power vs. Kopin |
| China Sun vs. Curtis Mathes Corp | China Sun vs. alpha En | China Sun vs. Ieh Corp | China Sun vs. Methode Electronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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