Correlation Between China Water and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both China Water and RETAIL FOOD 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 Water and RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Water Affairs and RETAIL FOOD GROUP, you can compare the effects of market volatilities on China Water and RETAIL FOOD 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 Water with a short position of RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Water and RETAIL FOOD.
Diversification Opportunities for China Water and RETAIL FOOD
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and RETAIL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding China Water Affairs and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP and China Water 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 Water Affairs are associated (or correlated) with RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of China Water i.e., China Water and RETAIL FOOD go up and down completely randomly.
Pair Corralation between China Water and RETAIL FOOD
Assuming the 90 days trading horizon China Water Affairs is expected to generate 1.17 times more return on investment than RETAIL FOOD. However, China Water is 1.17 times more volatile than RETAIL FOOD GROUP. It trades about 0.09 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about 0.01 per unit of risk. If you would invest 56.00 in China Water Affairs on September 12, 2024 and sell it today you would earn a total of 3.00 from holding China Water Affairs or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Water Affairs vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| China Water Affairs |
| RETAIL FOOD GROUP |
China Water and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Water and RETAIL FOOD
The main advantage of trading using opposite China Water and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Water position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| China Water vs. TSOGO SUN GAMING | China Water vs. GAMESTOP | China Water vs. Sunny Optical Technology | China Water vs. Media and Games |
| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |