Correlation Between Chengdu PUTIAN and Carsales
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN and Carsales 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 Carsales 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 CarsalesCom, you can compare the effects of market volatilities on Chengdu PUTIAN and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and Carsales.
Diversification Opportunities for Chengdu PUTIAN and Carsales
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chengdu and Carsales is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Chengdu PUTIAN i.e., Chengdu PUTIAN and Carsales go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and Carsales
Assuming the 90 days trading horizon Chengdu PUTIAN is expected to generate 9.25 times less return on investment than Carsales. In addition to that, Chengdu PUTIAN is 1.76 times more volatile than CarsalesCom. It trades about 0.01 of its total potential returns per unit of risk. CarsalesCom is currently generating about 0.24 per unit of volatility. If you would invest 2,220 in CarsalesCom on November 7, 2024 and sell it today you would earn a total of 200.00 from holding CarsalesCom or generate 9.01% 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. CarsalesCom
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| CarsalesCom |
Chengdu PUTIAN and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and Carsales
The main advantage of trading using opposite Chengdu PUTIAN and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Chengdu PUTIAN vs. UPDATE SOFTWARE | Chengdu PUTIAN vs. Yanzhou Coal Mining | Chengdu PUTIAN vs. ASURE SOFTWARE | Chengdu PUTIAN vs. Align Technology |
| Carsales vs. CITY OFFICE REIT | Carsales vs. NTG Nordic Transport | Carsales vs. SCIENCE IN SPORT | Carsales vs. TITANIUM TRANSPORTGROUP |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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