Correlation Between Chuangs China and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Chuangs China and REGAL ASIAN 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 REGAL ASIAN 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 REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on Chuangs China and REGAL ASIAN 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 REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and REGAL ASIAN.
Diversification Opportunities for Chuangs China and REGAL ASIAN
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chuangs and REGAL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS 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 REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Chuangs China i.e., Chuangs China and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Chuangs China and REGAL ASIAN
If you would invest 129.00 in REGAL ASIAN INVESTMENTS on August 27, 2024 and sell it today you would earn a total of 3.00 from holding REGAL ASIAN INVESTMENTS or generate 2.33% 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. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| Chuangs China Investments |
| REGAL ASIAN INVESTMENTS |
Chuangs China and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and REGAL ASIAN
The main advantage of trading using opposite Chuangs China and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.| Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech | Chuangs China vs. SIVERS SEMICONDUCTORS AB |
| REGAL ASIAN vs. Choice Hotels International | REGAL ASIAN vs. Meli Hotels International | REGAL ASIAN vs. InterContinental Hotels Group | REGAL ASIAN vs. METHODE ELECTRONICS |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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