Correlation Between China BlueChemical and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and VARIOUS EATERIES 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 VARIOUS EATERIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and VARIOUS EATERIES LS, you can compare the effects of market volatilities on China BlueChemical and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and VARIOUS EATERIES.
Diversification Opportunities for China BlueChemical and VARIOUS EATERIES
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and VARIOUS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of China BlueChemical i.e., China BlueChemical and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between China BlueChemical and VARIOUS EATERIES
Assuming the 90 days horizon China BlueChemical is expected to generate 4.02 times more return on investment than VARIOUS EATERIES. However, China BlueChemical is 4.02 times more volatile than VARIOUS EATERIES LS. It trades about 0.11 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.21 per unit of risk. If you would invest 24.00 in China BlueChemical on September 13, 2024 and sell it today you would earn a total of 2.00 from holding China BlueChemical or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| China BlueChemical |
| VARIOUS EATERIES |
China BlueChemical and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and VARIOUS EATERIES
The main advantage of trading using opposite China BlueChemical and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| China BlueChemical vs. Superior Plus Corp | China BlueChemical vs. SIVERS SEMICONDUCTORS AB | China BlueChemical vs. NorAm Drilling AS | China BlueChemical vs. Norsk Hydro ASA |
| VARIOUS EATERIES vs. Starbucks | VARIOUS EATERIES vs. Superior Plus Corp | VARIOUS EATERIES vs. SIVERS SEMICONDUCTORS AB | VARIOUS EATERIES vs. NorAm Drilling AS |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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