Correlation Between China BlueChemical and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and Strategic Investments 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 Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and Strategic Investments AS, you can compare the effects of market volatilities on China BlueChemical and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and Strategic Investments.
Diversification Opportunities for China BlueChemical and Strategic Investments
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Strategic is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of China BlueChemical i.e., China BlueChemical and Strategic Investments go up and down completely randomly.
Pair Corralation between China BlueChemical and Strategic Investments
Assuming the 90 days horizon China BlueChemical is expected to under-perform the Strategic Investments. In addition to that, China BlueChemical is 1.1 times more volatile than Strategic Investments AS. It trades about -0.03 of its total potential returns per unit of risk. Strategic Investments AS is currently generating about 0.0 per unit of volatility. If you would invest 15.00 in Strategic Investments AS on August 28, 2024 and sell it today you would lose (1.00) from holding Strategic Investments AS or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. Strategic Investments AS
Performance |
| Timeline |
| China BlueChemical |
| Strategic Investments |
China BlueChemical and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and Strategic Investments
The main advantage of trading using opposite China BlueChemical and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| China BlueChemical vs. CONAGRA FOODS | China BlueChemical vs. Clean Energy Fuels | China BlueChemical vs. Lifeway Foods | China BlueChemical vs. Austevoll Seafood ASA |
| Strategic Investments vs. The Bank of | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings | Strategic Investments vs. Origin Agritech |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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