Correlation Between Chuangs China and Industrial
Can any of the company-specific risk be diversified away by investing in both Chuangs China and Industrial 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 Industrial 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 Industrial and Commercial, you can compare the effects of market volatilities on Chuangs China and Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Industrial.
Diversification Opportunities for Chuangs China and Industrial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chuangs and Industrial is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Chuangs China i.e., Chuangs China and Industrial go up and down completely randomly.
Pair Corralation between Chuangs China and Industrial
If you would invest 57.00 in Industrial and Commercial on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Industrial and Commercial or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chuangs China Investments vs. Industrial and Commercial
Performance |
| Timeline |
| Chuangs China Investments |
| Industrial and Commercial |
Chuangs China and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Industrial
The main advantage of trading using opposite Chuangs China and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.| Chuangs China vs. Longfor Group Holdings | Chuangs China vs. Sino Land | Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings |
| Industrial vs. HK Electric Investments | Industrial vs. Postal Savings Bank | Industrial vs. Chuangs China Investments | Industrial vs. TITAN MACHINERY |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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