Correlation Between Chuangs China and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Chuangs China and Strategic Investments 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 Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on Chuangs China and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Strategic Investments.
Diversification Opportunities for Chuangs China and Strategic Investments
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and Strategic is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Chuangs China i.e., Chuangs China and Strategic Investments go up and down completely randomly.
Pair Corralation between Chuangs China and Strategic Investments
If you would invest 13.00 in Strategic Investments AS on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Strategic Investments AS or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Chuangs China Investments vs. Strategic Investments AS
Performance |
| Timeline |
| Chuangs China Investments |
| Strategic Investments |
Chuangs China and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Strategic Investments
The main advantage of trading using opposite Chuangs China and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech | Chuangs China vs. SIVERS SEMICONDUCTORS AB |
| Strategic Investments vs. The Bank of | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings | Strategic Investments vs. Origin Agritech |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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