Correlation Between Chuangs China and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both Chuangs China and FIREWEED METALS 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 FIREWEED METALS 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 FIREWEED METALS P, you can compare the effects of market volatilities on Chuangs China and FIREWEED METALS 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 FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and FIREWEED METALS.
Diversification Opportunities for Chuangs China and FIREWEED METALS
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chuangs and FIREWEED is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P 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 FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of Chuangs China i.e., Chuangs China and FIREWEED METALS go up and down completely randomly.
Pair Corralation between Chuangs China and FIREWEED METALS
Assuming the 90 days horizon Chuangs China Investments is expected to under-perform the FIREWEED METALS. In addition to that, Chuangs China is 1.41 times more volatile than FIREWEED METALS P. It trades about -0.01 of its total potential returns per unit of risk. FIREWEED METALS P is currently generating about 0.04 per unit of volatility. If you would invest 66.00 in FIREWEED METALS P on August 31, 2024 and sell it today you would earn a total of 25.00 from holding FIREWEED METALS P or generate 37.88% 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. FIREWEED METALS P
Performance |
| Timeline |
| Chuangs China Investments |
| FIREWEED METALS P |
Chuangs China and FIREWEED METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and FIREWEED METALS
The main advantage of trading using opposite Chuangs China and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.| Chuangs China vs. Sun Hung Kai | Chuangs China vs. China Overseas Land | Chuangs China vs. CHINA VANKE TD | Chuangs China vs. Longfor Group Holdings |
| FIREWEED METALS vs. Rio Tinto Group | FIREWEED METALS vs. Liontown Resources Limited | FIREWEED METALS vs. American Lithium Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |