Correlation Between Chuangs China and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both Chuangs China and VARIOUS EATERIES 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS, you can compare the effects of market volatilities on Chuangs China and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and VARIOUS EATERIES.
Diversification Opportunities for Chuangs China and VARIOUS EATERIES
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chuangs and VARIOUS is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of Chuangs China i.e., Chuangs China and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between Chuangs China and VARIOUS EATERIES
If you would invest 1.00 in Chuangs China Investments on September 12, 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. VARIOUS EATERIES LS
Performance |
| Timeline |
| Chuangs China Investments |
| VARIOUS EATERIES |
Chuangs China and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and VARIOUS EATERIES
The main advantage of trading using opposite Chuangs China and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| Chuangs China vs. RCM TECHNOLOGIES | Chuangs China vs. Spirent Communications plc | Chuangs China vs. CITIC Telecom International | Chuangs China vs. Lion Biotechnologies |
| VARIOUS EATERIES vs. Starbucks | VARIOUS EATERIES vs. Superior Plus Corp | VARIOUS EATERIES vs. SIVERS SEMICONDUCTORS AB | VARIOUS EATERIES vs. NorAm Drilling AS |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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