Correlation Between China BlueChemical and LANSON BCC
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and LANSON BCC 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 LANSON BCC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and LANSON BCC INH EO, you can compare the effects of market volatilities on China BlueChemical and LANSON BCC 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 LANSON BCC. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and LANSON BCC.
Diversification Opportunities for China BlueChemical and LANSON BCC
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and LANSON is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and LANSON BCC INH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANSON BCC INH 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 LANSON BCC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANSON BCC INH has no effect on the direction of China BlueChemical i.e., China BlueChemical and LANSON BCC go up and down completely randomly.
Pair Corralation between China BlueChemical and LANSON BCC
Assuming the 90 days horizon China BlueChemical is expected to generate 2.98 times more return on investment than LANSON BCC. However, China BlueChemical is 2.98 times more volatile than LANSON BCC INH EO. It trades about 0.02 of its potential returns per unit of risk. LANSON BCC INH EO is currently generating about 0.04 per unit of risk. If you would invest 26.00 in China BlueChemical on November 3, 2024 and sell it today you would earn a total of 0.00 from holding China BlueChemical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. LANSON BCC INH EO
Performance |
| Timeline |
| China BlueChemical |
| LANSON BCC INH |
China BlueChemical and LANSON BCC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and LANSON BCC
The main advantage of trading using opposite China BlueChemical and LANSON BCC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, LANSON BCC 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 LANSON BCC will offset losses from the drop in LANSON BCC's long position.| China BlueChemical vs. STMICROELECTRONICS | China BlueChemical vs. Richardson Electronics | China BlueChemical vs. TT Electronics PLC | China BlueChemical vs. UMC Electronics Co |
| LANSON BCC vs. COPLAND ROAD CAPITAL | LANSON BCC vs. Hanison Construction Holdings | LANSON BCC vs. Australian Agricultural | LANSON BCC vs. GOLD ROAD RES |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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