Correlation Between Chuangs China and AOYAMA TRADING
Can any of the company-specific risk be diversified away by investing in both Chuangs China and AOYAMA TRADING 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 AOYAMA TRADING 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 AOYAMA TRADING, you can compare the effects of market volatilities on Chuangs China and AOYAMA TRADING 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 AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and AOYAMA TRADING.
Diversification Opportunities for Chuangs China and AOYAMA TRADING
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and AOYAMA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING 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 AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of Chuangs China i.e., Chuangs China and AOYAMA TRADING go up and down completely randomly.
Pair Corralation between Chuangs China and AOYAMA TRADING
Assuming the 90 days horizon Chuangs China Investments is expected to under-perform the AOYAMA TRADING. In addition to that, Chuangs China is 1.17 times more volatile than AOYAMA TRADING. It trades about -0.01 of its total potential returns per unit of risk. AOYAMA TRADING is currently generating about 0.08 per unit of volatility. If you would invest 327.00 in AOYAMA TRADING on August 29, 2024 and sell it today you would earn a total of 1,073 from holding AOYAMA TRADING or generate 328.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Chuangs China Investments vs. AOYAMA TRADING
Performance |
| Timeline |
| Chuangs China Investments |
| AOYAMA TRADING |
Chuangs China and AOYAMA TRADING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and AOYAMA TRADING
The main advantage of trading using opposite Chuangs China and AOYAMA TRADING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, AOYAMA TRADING 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 AOYAMA TRADING will offset losses from the drop in AOYAMA TRADING's long position.| Chuangs China vs. Playtech plc | Chuangs China vs. KOOL2PLAY SA ZY | Chuangs China vs. PLAYSTUDIOS A DL 0001 | Chuangs China vs. ANTA SPORTS PRODUCT |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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