Correlation Between Chuangs China and Archer Daniels
Can any of the company-specific risk be diversified away by investing in both Chuangs China and Archer Daniels 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 Archer Daniels 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 Archer Daniels Midland, you can compare the effects of market volatilities on Chuangs China and Archer Daniels 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 Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Archer Daniels.
Diversification Opportunities for Chuangs China and Archer Daniels
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and Archer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland 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 Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of Chuangs China i.e., Chuangs China and Archer Daniels go up and down completely randomly.
Pair Corralation between Chuangs China and Archer Daniels
Assuming the 90 days horizon Chuangs China Investments is expected to under-perform the Archer Daniels. In addition to that, Chuangs China is 3.01 times more volatile than Archer Daniels Midland. It trades about -0.01 of its total potential returns per unit of risk. Archer Daniels Midland is currently generating about -0.02 per unit of volatility. If you would invest 6,485 in Archer Daniels Midland on September 4, 2024 and sell it today you would lose (1,323) from holding Archer Daniels Midland or give up 20.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Chuangs China Investments vs. Archer Daniels Midland
Performance |
| Timeline |
| Chuangs China Investments |
| Archer Daniels Midland |
Chuangs China and Archer Daniels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Archer Daniels
The main advantage of trading using opposite Chuangs China and Archer Daniels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, Archer Daniels 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 Archer Daniels will offset losses from the drop in Archer Daniels' long position.| Chuangs China vs. Hongkong Land Holdings | Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech |
| Archer Daniels vs. KAUFMAN ET BROAD | Archer Daniels vs. Air Transport Services | Archer Daniels vs. Broadcom | Archer Daniels vs. MGIC INVESTMENT |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |