Correlation Between Chengdu PUTIAN and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN and Alfa Financial 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 Chengdu PUTIAN and Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chengdu PUTIAN Telecommunications and Alfa Financial Software, you can compare the effects of market volatilities on Chengdu PUTIAN and Alfa Financial 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 Chengdu PUTIAN with a short position of Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and Alfa Financial.
Diversification Opportunities for Chengdu PUTIAN and Alfa Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chengdu and Alfa is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software and Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications are associated (or correlated) with Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Chengdu PUTIAN i.e., Chengdu PUTIAN and Alfa Financial go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and Alfa Financial
Assuming the 90 days trading horizon Chengdu PUTIAN Telecommunications is expected to generate 2.4 times more return on investment than Alfa Financial. However, Chengdu PUTIAN is 2.4 times more volatile than Alfa Financial Software. It trades about 0.06 of its potential returns per unit of risk. Alfa Financial Software is currently generating about -0.18 per unit of risk. If you would invest 7.30 in Chengdu PUTIAN Telecommunications on October 16, 2024 and sell it today you would earn a total of 0.45 from holding Chengdu PUTIAN Telecommunications or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. Alfa Financial Software
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| Alfa Financial Software |
Chengdu PUTIAN and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and Alfa Financial
The main advantage of trading using opposite Chengdu PUTIAN and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Chengdu PUTIAN vs. ZTE Corporation | Chengdu PUTIAN vs. Superior Plus Corp | Chengdu PUTIAN vs. NMI Holdings | Chengdu PUTIAN vs. SIVERS SEMICONDUCTORS AB |
| Alfa Financial vs. Iridium Communications | Alfa Financial vs. ecotel communication ag | Alfa Financial vs. Cairo Communication SpA | Alfa Financial vs. Chengdu PUTIAN Telecommunications |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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