Correlation Between Chuangs China and GEAR4MUSIC (HLDGS)
Can any of the company-specific risk be diversified away by investing in both Chuangs China and GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC LS 10, you can compare the effects of market volatilities on Chuangs China and GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC (HLDGS). Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and GEAR4MUSIC (HLDGS).
Diversification Opportunities for Chuangs China and GEAR4MUSIC (HLDGS)
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and GEAR4MUSIC is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC (HLDGS). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC (HLDGS) has no effect on the direction of Chuangs China i.e., Chuangs China and GEAR4MUSIC (HLDGS) go up and down completely randomly.
Pair Corralation between Chuangs China and GEAR4MUSIC (HLDGS)
If you would invest 185.00 in GEAR4MUSIC LS 10 on October 12, 2024 and sell it today you would earn a total of 4.00 from holding GEAR4MUSIC LS 10 or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. GEAR4MUSIC LS 10
Performance |
| Timeline |
| Chuangs China Investments |
| GEAR4MUSIC (HLDGS) |
Chuangs China and GEAR4MUSIC (HLDGS) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and GEAR4MUSIC (HLDGS)
The main advantage of trading using opposite Chuangs China and GEAR4MUSIC (HLDGS) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC (HLDGS) will offset losses from the drop in GEAR4MUSIC (HLDGS)'s long position.| Chuangs China vs. AEON METALS LTD | Chuangs China vs. HYATT HOTELS A | Chuangs China vs. UNIVMUSIC GRPADR050 | Chuangs China vs. Xenia Hotels Resorts |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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