Correlation Between Chuangs China and AMADEUS IT
Can any of the company-specific risk be diversified away by investing in both Chuangs China and AMADEUS IT 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 AMADEUS IT 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 AMADEUS IT GRP, you can compare the effects of market volatilities on Chuangs China and AMADEUS IT 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 AMADEUS IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and AMADEUS IT.
Diversification Opportunities for Chuangs China and AMADEUS IT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and AMADEUS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and AMADEUS IT GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMADEUS IT GRP 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 AMADEUS IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMADEUS IT GRP has no effect on the direction of Chuangs China i.e., Chuangs China and AMADEUS IT go up and down completely randomly.
Pair Corralation between Chuangs China and AMADEUS IT
Assuming the 90 days horizon Chuangs China is expected to generate 41.46 times less return on investment than AMADEUS IT. But when comparing it to its historical volatility, Chuangs China Investments is 1.35 times less risky than AMADEUS IT. It trades about 0.0 of its potential returns per unit of risk. AMADEUS IT GRP is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,000 in AMADEUS IT GRP on September 3, 2024 and sell it today you would earn a total of 600.00 from holding AMADEUS IT GRP or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. AMADEUS IT GRP
Performance |
| Timeline |
| Chuangs China Investments |
| AMADEUS IT GRP |
Chuangs China and AMADEUS IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and AMADEUS IT
The main advantage of trading using opposite Chuangs China and AMADEUS IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, AMADEUS IT 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 AMADEUS IT will offset losses from the drop in AMADEUS IT's long position.| Chuangs China vs. Treasury Wine Estates | Chuangs China vs. GigaMedia | Chuangs China vs. NAKED WINES PLC | Chuangs China vs. Tencent Music Entertainment |
| AMADEUS IT vs. Goosehead Insurance | AMADEUS IT vs. Ping An Insurance | AMADEUS IT vs. Direct Line Insurance | AMADEUS IT vs. Perdoceo Education |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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