Correlation Between Chuangs China and TITAN MACHINERY
Can any of the company-specific risk be diversified away by investing in both Chuangs China and TITAN MACHINERY 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 Chuangs China and TITAN MACHINERY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and TITAN MACHINERY, you can compare the effects of market volatilities on Chuangs China and TITAN MACHINERY 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 Chuangs China with a short position of TITAN MACHINERY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and TITAN MACHINERY.
Diversification Opportunities for Chuangs China and TITAN MACHINERY
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and TITAN is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and TITAN MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITAN MACHINERY and Chuangs China 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 Chuangs China Investments are associated (or correlated) with TITAN MACHINERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITAN MACHINERY has no effect on the direction of Chuangs China i.e., Chuangs China and TITAN MACHINERY go up and down completely randomly.
Pair Corralation between Chuangs China and TITAN MACHINERY
If you would invest 1,350 in TITAN MACHINERY on August 25, 2024 and sell it today you would earn a total of 20.00 from holding TITAN MACHINERY or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. TITAN MACHINERY
Performance |
| Timeline |
| Chuangs China Investments |
| TITAN MACHINERY |
Chuangs China and TITAN MACHINERY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and TITAN MACHINERY
The main advantage of trading using opposite Chuangs China and TITAN MACHINERY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, TITAN MACHINERY 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 TITAN MACHINERY will offset losses from the drop in TITAN MACHINERY's long position.| Chuangs China vs. Longfor Group Holdings | Chuangs China vs. Sino Land | Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings |
| TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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