Correlation Between Chuangs China and United Overseas
Can any of the company-specific risk be diversified away by investing in both Chuangs China and United Overseas 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 United Overseas 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 United Overseas Bank, you can compare the effects of market volatilities on Chuangs China and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and United Overseas.
Diversification Opportunities for Chuangs China and United Overseas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas Bank 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of Chuangs China i.e., Chuangs China and United Overseas go up and down completely randomly.
Pair Corralation between Chuangs China and United Overseas
If you would invest 2,531 in United Overseas Bank on October 22, 2024 and sell it today you would earn a total of 69.00 from holding United Overseas Bank or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. United Overseas Bank
Performance |
| Timeline |
| Chuangs China Investments |
| United Overseas Bank |
Chuangs China and United Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and United Overseas
The main advantage of trading using opposite Chuangs China and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' long position.| Chuangs China vs. ARDAGH METAL PACDL 0001 | Chuangs China vs. Tradeweb Markets | Chuangs China vs. FLOW TRADERS LTD | Chuangs China vs. AUTO TRADER ADR |
| United Overseas vs. EIDESVIK OFFSHORE NK | United Overseas vs. Cognizant Technology Solutions | United Overseas vs. PICKN PAY STORES | United Overseas vs. COSTCO WHOLESALE CDR |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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