Correlation Between Chengdu PUTIAN and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN and Perseus Mining 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 Perseus Mining 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 Perseus Mining Limited, you can compare the effects of market volatilities on Chengdu PUTIAN and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and Perseus Mining.
Diversification Opportunities for Chengdu PUTIAN and Perseus Mining
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chengdu and Perseus is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Chengdu PUTIAN i.e., Chengdu PUTIAN and Perseus Mining go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and Perseus Mining
Assuming the 90 days trading horizon Chengdu PUTIAN Telecommunications is expected to generate 3.62 times more return on investment than Perseus Mining. However, Chengdu PUTIAN is 3.62 times more volatile than Perseus Mining Limited. It trades about 0.05 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.09 per unit of risk. If you would invest 6.80 in Chengdu PUTIAN Telecommunications on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Chengdu PUTIAN Telecommunications or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. Perseus Mining Limited
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| Perseus Mining |
Chengdu PUTIAN and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and Perseus Mining
The main advantage of trading using opposite Chengdu PUTIAN and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| Chengdu PUTIAN vs. CARDINAL HEALTH | Chengdu PUTIAN vs. SENECA FOODS A | Chengdu PUTIAN vs. Universal Health Realty | Chengdu PUTIAN vs. Cal Maine Foods |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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