Correlation Between Chuangs China and Apple
Can any of the company-specific risk be diversified away by investing in both Chuangs China and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Chuangs China and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Apple.
Diversification Opportunities for Chuangs China and Apple
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and Apple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Chuangs China i.e., Chuangs China and Apple go up and down completely randomly.
Pair Corralation between Chuangs China and Apple
Assuming the 90 days horizon Chuangs China Investments is expected to under-perform the Apple. In addition to that, Chuangs China is 3.78 times more volatile than Apple Inc. It trades about -0.01 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.07 per unit of volatility. If you would invest 13,979 in Apple Inc on October 28, 2024 and sell it today you would earn a total of 7,226 from holding Apple Inc or generate 51.69% 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. Apple Inc
Performance |
| Timeline |
| Chuangs China Investments |
| Apple Inc |
Chuangs China and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Apple
The main advantage of trading using opposite Chuangs China and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Chuangs China vs. PTT Global Chemical | Chuangs China vs. Sekisui Chemical Co | Chuangs China vs. Mitsui Chemicals | Chuangs China vs. Silicon Motion Technology |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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