Correlation Between CHINA OIL and Food Life
Can any of the company-specific risk be diversified away by investing in both CHINA OIL and Food Life 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 CHINA OIL and Food Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA OIL AND and Food Life Companies, you can compare the effects of market volatilities on CHINA OIL and Food Life 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 CHINA OIL with a short position of Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA OIL and Food Life.
Diversification Opportunities for CHINA OIL and Food Life
Poor diversification
The 3 months correlation between CHINA and Food is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CHINA OIL AND and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies and CHINA OIL 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 CHINA OIL AND are associated (or correlated) with Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of CHINA OIL i.e., CHINA OIL and Food Life go up and down completely randomly.
Pair Corralation between CHINA OIL and Food Life
If you would invest 1,780 in Food Life Companies on September 3, 2024 and sell it today you would earn a total of 360.00 from holding Food Life Companies or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA OIL AND vs. Food Life Companies
Performance |
| Timeline |
| CHINA OIL AND |
| Food Life Companies |
CHINA OIL and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA OIL and Food Life
The main advantage of trading using opposite CHINA OIL and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA OIL position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| CHINA OIL vs. INSURANCE AUST GRP | CHINA OIL vs. SCANSOURCE | CHINA OIL vs. Japan Post Insurance | CHINA OIL vs. QBE Insurance Group |
| Food Life vs. McDonalds | Food Life vs. Chipotle Mexican Grill | Food Life vs. Superior Plus Corp | Food Life vs. NMI Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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