Correlation Between Chengdu PUTIAN and Alstria Office
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN and Alstria Office 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 Alstria Office 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 alstria office REIT AG, you can compare the effects of market volatilities on Chengdu PUTIAN and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and Alstria Office.
Diversification Opportunities for Chengdu PUTIAN and Alstria Office
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chengdu and Alstria is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Chengdu PUTIAN i.e., Chengdu PUTIAN and Alstria Office go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and Alstria Office
Assuming the 90 days trading horizon Chengdu PUTIAN Telecommunications is expected to generate 0.51 times more return on investment than Alstria Office. However, Chengdu PUTIAN Telecommunications is 1.95 times less risky than Alstria Office. It trades about 0.07 of its potential returns per unit of risk. alstria office REIT AG is currently generating about -0.2 per unit of risk. If you would invest 7.10 in Chengdu PUTIAN Telecommunications on October 12, 2024 and sell it today you would earn a total of 0.25 from holding Chengdu PUTIAN Telecommunications or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. alstria office REIT AG
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| alstria office REIT |
Chengdu PUTIAN and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and Alstria Office
The main advantage of trading using opposite Chengdu PUTIAN and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office'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 |
| Alstria Office vs. Chengdu PUTIAN Telecommunications | Alstria Office vs. SK TELECOM TDADR | Alstria Office vs. Siemens Healthineers AG | Alstria Office vs. WESANA HEALTH HOLD |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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