Correlation Between Chuangs China and VULCAN MATERIALS
Can any of the company-specific risk be diversified away by investing in both Chuangs China and VULCAN MATERIALS 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 VULCAN MATERIALS 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 VULCAN MATERIALS, you can compare the effects of market volatilities on Chuangs China and VULCAN MATERIALS 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 VULCAN MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and VULCAN MATERIALS.
Diversification Opportunities for Chuangs China and VULCAN MATERIALS
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and VULCAN is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and VULCAN MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VULCAN MATERIALS 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 VULCAN MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VULCAN MATERIALS has no effect on the direction of Chuangs China i.e., Chuangs China and VULCAN MATERIALS go up and down completely randomly.
Pair Corralation between Chuangs China and VULCAN MATERIALS
If you would invest 1.00 in Chuangs China Investments on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Chuangs China Investments or generate 0.0% 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. VULCAN MATERIALS
Performance |
| Timeline |
| Chuangs China Investments |
| VULCAN MATERIALS |
Chuangs China and VULCAN MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and VULCAN MATERIALS
The main advantage of trading using opposite Chuangs China and VULCAN MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, VULCAN MATERIALS 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 VULCAN MATERIALS will offset losses from the drop in VULCAN MATERIALS's long position.| Chuangs China vs. RCM TECHNOLOGIES | Chuangs China vs. Spirent Communications plc | Chuangs China vs. CITIC Telecom International | Chuangs China vs. Lion Biotechnologies |
| VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc | VULCAN MATERIALS vs. Apple Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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