Correlation Between COMMERCIAL VEHICLE and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both COMMERCIAL VEHICLE and Chengdu PUTIAN 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 COMMERCIAL VEHICLE and Chengdu PUTIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMMERCIAL VEHICLE and Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on COMMERCIAL VEHICLE and Chengdu PUTIAN 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 COMMERCIAL VEHICLE with a short position of Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL VEHICLE and Chengdu PUTIAN.
Diversification Opportunities for COMMERCIAL VEHICLE and Chengdu PUTIAN
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COMMERCIAL and Chengdu is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL VEHICLE and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE are associated (or correlated) with Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of COMMERCIAL VEHICLE i.e., COMMERCIAL VEHICLE and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between COMMERCIAL VEHICLE and Chengdu PUTIAN
Assuming the 90 days trading horizon COMMERCIAL VEHICLE is expected to generate 0.93 times more return on investment than Chengdu PUTIAN. However, COMMERCIAL VEHICLE is 1.07 times less risky than Chengdu PUTIAN. It trades about 0.1 of its potential returns per unit of risk. Chengdu PUTIAN Telecommunications is currently generating about 0.08 per unit of risk. If you would invest 200.00 in COMMERCIAL VEHICLE on October 22, 2024 and sell it today you would earn a total of 10.00 from holding COMMERCIAL VEHICLE or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
COMMERCIAL VEHICLE vs. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| COMMERCIAL VEHICLE |
| Chengdu PUTIAN Telec |
COMMERCIAL VEHICLE and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL VEHICLE and Chengdu PUTIAN
The main advantage of trading using opposite COMMERCIAL VEHICLE and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL VEHICLE position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN's long position.| COMMERCIAL VEHICLE vs. MOBILE FACTORY INC | COMMERCIAL VEHICLE vs. Entravision Communications | COMMERCIAL VEHICLE vs. Granite Construction | COMMERCIAL VEHICLE vs. Mobilezone Holding AG |
| Chengdu PUTIAN vs. Cars Inc | Chengdu PUTIAN vs. Commercial Vehicle Group | Chengdu PUTIAN vs. Chuangs China Investments | Chengdu PUTIAN vs. COMMERCIAL VEHICLE |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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