Correlation Between Chengdu PUTIAN and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN and China BlueChemical 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 China BlueChemical 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 China BlueChemical, you can compare the effects of market volatilities on Chengdu PUTIAN and China BlueChemical 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 China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and China BlueChemical.
Diversification Opportunities for Chengdu PUTIAN and China BlueChemical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chengdu and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical 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 China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of Chengdu PUTIAN i.e., Chengdu PUTIAN and China BlueChemical go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and China BlueChemical
Assuming the 90 days trading horizon Chengdu PUTIAN Telecommunications is expected to generate 1.02 times more return on investment than China BlueChemical. However, Chengdu PUTIAN is 1.02 times more volatile than China BlueChemical. It trades about 0.09 of its potential returns per unit of risk. China BlueChemical is currently generating about -0.16 per unit of risk. If you would invest 7.50 in Chengdu PUTIAN Telecommunications on November 6, 2024 and sell it today you would earn a total of 0.35 from holding Chengdu PUTIAN Telecommunications or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. China BlueChemical
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| China BlueChemical |
Chengdu PUTIAN and China BlueChemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and China BlueChemical
The main advantage of trading using opposite Chengdu PUTIAN and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN position performs unexpectedly, China BlueChemical 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 BlueChemical will offset losses from the drop in China BlueChemical's long position.| Chengdu PUTIAN vs. UNIVERSAL DISPLAY | Chengdu PUTIAN vs. CSSC Offshore Marine | Chengdu PUTIAN vs. ANTA SPORTS PRODUCT | Chengdu PUTIAN vs. Columbia Sportswear |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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