Correlation Between Chuangs China and SENECA FOODS
Can any of the company-specific risk be diversified away by investing in both Chuangs China and SENECA FOODS 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 SENECA FOODS 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 SENECA FOODS A, you can compare the effects of market volatilities on Chuangs China and SENECA FOODS 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 SENECA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and SENECA FOODS.
Diversification Opportunities for Chuangs China and SENECA FOODS
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and SENECA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Chuangs China i.e., Chuangs China and SENECA FOODS go up and down completely randomly.
Pair Corralation between Chuangs China and SENECA FOODS
Assuming the 90 days horizon Chuangs China is expected to generate 1.59 times less return on investment than SENECA FOODS. In addition to that, Chuangs China is 2.5 times more volatile than SENECA FOODS A. It trades about 0.02 of its total potential returns per unit of risk. SENECA FOODS A is currently generating about 0.06 per unit of volatility. If you would invest 5,100 in SENECA FOODS A on August 29, 2024 and sell it today you would earn a total of 1,500 from holding SENECA FOODS A or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.53% |
| Values | Daily Returns |
Chuangs China Investments vs. SENECA FOODS A
Performance |
| Timeline |
| Chuangs China Investments |
| SENECA FOODS A |
Chuangs China and SENECA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and SENECA FOODS
The main advantage of trading using opposite Chuangs China and SENECA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, SENECA FOODS 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 SENECA FOODS will offset losses from the drop in SENECA FOODS's long position.| Chuangs China vs. Playtech plc | Chuangs China vs. KOOL2PLAY SA ZY | Chuangs China vs. PLAYSTUDIOS A DL 0001 | Chuangs China vs. ANTA SPORTS PRODUCT |
| SENECA FOODS vs. REGAL ASIAN INVESTMENTS | SENECA FOODS vs. Chuangs China Investments | SENECA FOODS vs. Methode Electronics | SENECA FOODS vs. LPKF Laser Electronics |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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