Correlation Between Chuangs China and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Chuangs China and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on Chuangs China and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and SOLSTAD OFFSHORE.
Diversification Opportunities for Chuangs China and SOLSTAD OFFSHORE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and SOLSTAD is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLSTAD OFFSHORE has no effect on the direction of Chuangs China i.e., Chuangs China and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between Chuangs China and SOLSTAD OFFSHORE
If you would invest 320.00 in SOLSTAD OFFSHORE NK on October 16, 2024 and sell it today you would earn a total of 31.00 from holding SOLSTAD OFFSHORE NK or generate 9.69% 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. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| Chuangs China Investments |
| SOLSTAD OFFSHORE |
Chuangs China and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and SOLSTAD OFFSHORE
The main advantage of trading using opposite Chuangs China and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE will offset losses from the drop in SOLSTAD OFFSHORE's long position.| Chuangs China vs. Calibre Mining Corp | Chuangs China vs. Jacquet Metal Service | Chuangs China vs. Zijin Mining Group | Chuangs China vs. MCEWEN MINING INC |
| SOLSTAD OFFSHORE vs. Harmony Gold Mining | SOLSTAD OFFSHORE vs. Chuangs China Investments | SOLSTAD OFFSHORE vs. EAT WELL INVESTMENT | SOLSTAD OFFSHORE vs. WisdomTree Investments |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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