Correlation Between Chuangs China and ANTA SPORTS
Can any of the company-specific risk be diversified away by investing in both Chuangs China and ANTA SPORTS 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 ANTA SPORTS 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 ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on Chuangs China and ANTA SPORTS 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 ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and ANTA SPORTS.
Diversification Opportunities for Chuangs China and ANTA SPORTS
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chuangs and ANTA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT 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 ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of Chuangs China i.e., Chuangs China and ANTA SPORTS go up and down completely randomly.
Pair Corralation between Chuangs China and ANTA SPORTS
Assuming the 90 days horizon Chuangs China Investments is expected to generate 0.37 times more return on investment than ANTA SPORTS. However, Chuangs China Investments is 2.74 times less risky than ANTA SPORTS. It trades about 0.01 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about -0.07 per unit of risk. If you would invest 1.00 in Chuangs China Investments on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Chuangs China Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. ANTA SPORTS PRODUCT
Performance |
| Timeline |
| Chuangs China Investments |
| ANTA SPORTS PRODUCT |
Chuangs China and ANTA SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and ANTA SPORTS
The main advantage of trading using opposite Chuangs China and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, ANTA SPORTS 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 ANTA SPORTS will offset losses from the drop in ANTA SPORTS's long position.| Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech | Chuangs China vs. SIVERS SEMICONDUCTORS AB |
| ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Microsoft | ANTA SPORTS vs. Microsoft |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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