Correlation Between Chuangs China and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Chuangs China and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics, you can compare the effects of market volatilities on Chuangs China and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Arrow Electronics.
Diversification Opportunities for Chuangs China and Arrow Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and Arrow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Chuangs China i.e., Chuangs China and Arrow Electronics go up and down completely randomly.
Pair Corralation between Chuangs China and Arrow Electronics
If you would invest 11,000 in Arrow Electronics on October 22, 2024 and sell it today you would earn a total of 300.00 from holding Arrow Electronics or generate 2.73% 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. Arrow Electronics
Performance |
| Timeline |
| Chuangs China Investments |
| Arrow Electronics |
Chuangs China and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Arrow Electronics
The main advantage of trading using opposite Chuangs China and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Chuangs China vs. ARDAGH METAL PACDL 0001 | Chuangs China vs. Tradeweb Markets | Chuangs China vs. FLOW TRADERS LTD | Chuangs China vs. AUTO TRADER ADR |
| Arrow Electronics vs. AGNC INVESTMENT | Arrow Electronics vs. BANK OF CHINA | Arrow Electronics vs. EAT WELL INVESTMENT | Arrow Electronics vs. Chuangs China Investments |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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