Correlation Between Chuangs China and MINCO SILVER
Can any of the company-specific risk be diversified away by investing in both Chuangs China and MINCO SILVER 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 MINCO SILVER 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 MINCO SILVER, you can compare the effects of market volatilities on Chuangs China and MINCO SILVER 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 MINCO SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and MINCO SILVER.
Diversification Opportunities for Chuangs China and MINCO SILVER
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and MINCO is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO SILVER 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 MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of Chuangs China i.e., Chuangs China and MINCO SILVER go up and down completely randomly.
Pair Corralation between Chuangs China and MINCO SILVER
Assuming the 90 days horizon Chuangs China is expected to generate 64.03 times less return on investment than MINCO SILVER. But when comparing it to its historical volatility, Chuangs China Investments is 5.55 times less risky than MINCO SILVER. It trades about 0.0 of its potential returns per unit of risk. MINCO SILVER is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12.00 in MINCO SILVER on August 28, 2024 and sell it today you would earn a total of 1.00 from holding MINCO SILVER or generate 8.33% 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. MINCO SILVER
Performance |
| Timeline |
| Chuangs China Investments |
| MINCO SILVER |
Chuangs China and MINCO SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and MINCO SILVER
The main advantage of trading using opposite Chuangs China and MINCO SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, MINCO SILVER 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 MINCO SILVER will offset losses from the drop in MINCO SILVER's long position.| Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech | Chuangs China vs. SIVERS SEMICONDUCTORS AB |
| MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Microsoft |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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