Correlation Between Chuangs China and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Chuangs China and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on Chuangs China and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Postal Savings.
Diversification Opportunities for Chuangs China and Postal Savings
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chuangs and Postal is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Chuangs China i.e., Chuangs China and Postal Savings go up and down completely randomly.
Pair Corralation between Chuangs China and Postal Savings
If you would invest 1.00 in Chuangs China Investments on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Chuangs China Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. Postal Savings Bank
Performance |
| Timeline |
| Chuangs China Investments |
| Postal Savings Bank |
Chuangs China and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Postal Savings
The main advantage of trading using opposite Chuangs China and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Chuangs China vs. Longfor Group Holdings | Chuangs China vs. Sino Land | Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings |
| Postal Savings vs. Deutsche Bank Aktiengesellschaft | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings vs. Origin Agritech |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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