Correlation Between FORMPIPE SOFTWARE and China Resources
Can any of the company-specific risk be diversified away by investing in both FORMPIPE SOFTWARE and China Resources 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 FORMPIPE SOFTWARE and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORMPIPE SOFTWARE AB and China Resources Power, you can compare the effects of market volatilities on FORMPIPE SOFTWARE and China Resources 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 FORMPIPE SOFTWARE with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORMPIPE SOFTWARE and China Resources.
Diversification Opportunities for FORMPIPE SOFTWARE and China Resources
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FORMPIPE and China is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB and China Resources Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Power and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Power has no effect on the direction of FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and China Resources go up and down completely randomly.
Pair Corralation between FORMPIPE SOFTWARE and China Resources
Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to generate 3.21 times more return on investment than China Resources. However, FORMPIPE SOFTWARE is 3.21 times more volatile than China Resources Power. It trades about 0.08 of its potential returns per unit of risk. China Resources Power is currently generating about -0.41 per unit of risk. If you would invest 199.00 in FORMPIPE SOFTWARE AB on October 29, 2024 and sell it today you would earn a total of 10.00 from holding FORMPIPE SOFTWARE AB or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORMPIPE SOFTWARE AB vs. China Resources Power
Performance |
| Timeline |
| FORMPIPE SOFTWARE |
| China Resources Power |
FORMPIPE SOFTWARE and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORMPIPE SOFTWARE and China Resources
The main advantage of trading using opposite FORMPIPE SOFTWARE and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| FORMPIPE SOFTWARE vs. Fukuyama Transporting Co | FORMPIPE SOFTWARE vs. Thai Beverage Public | FORMPIPE SOFTWARE vs. Suntory Beverage Food | FORMPIPE SOFTWARE vs. Air Transport Services |
| China Resources vs. Minerals Technologies | China Resources vs. Allegheny Technologies Incorporated | China Resources vs. Easy Software AG | China Resources vs. BioNTech SE |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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