Correlation Between China BlueChemical and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and Adriatic Metals 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 BlueChemical and Adriatic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and Adriatic Metals Plc, you can compare the effects of market volatilities on China BlueChemical and Adriatic Metals 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 BlueChemical with a short position of Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and Adriatic Metals.
Diversification Opportunities for China BlueChemical and Adriatic Metals
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Adriatic is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and Adriatic Metals Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals Plc and China BlueChemical 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 BlueChemical are associated (or correlated) with Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals Plc has no effect on the direction of China BlueChemical i.e., China BlueChemical and Adriatic Metals go up and down completely randomly.
Pair Corralation between China BlueChemical and Adriatic Metals
Assuming the 90 days horizon China BlueChemical is expected to under-perform the Adriatic Metals. In addition to that, China BlueChemical is 1.84 times more volatile than Adriatic Metals Plc. It trades about -0.03 of its total potential returns per unit of risk. Adriatic Metals Plc is currently generating about 0.04 per unit of volatility. If you would invest 246.00 in Adriatic Metals Plc on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Adriatic Metals Plc or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. Adriatic Metals Plc
Performance |
| Timeline |
| China BlueChemical |
| Adriatic Metals Plc |
China BlueChemical and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and Adriatic Metals
The main advantage of trading using opposite China BlueChemical and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| China BlueChemical vs. CONAGRA FOODS | China BlueChemical vs. Clean Energy Fuels | China BlueChemical vs. Lifeway Foods | China BlueChemical vs. Austevoll Seafood ASA |
| Adriatic Metals vs. Globe Trade Centre | Adriatic Metals vs. CONAGRA FOODS | Adriatic Metals vs. PT Indofood Sukses | Adriatic Metals vs. Food Life Companies |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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