Correlation Between China BlueChemical and CLEMONDO GROUP
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and CLEMONDO GROUP 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 CLEMONDO GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and CLEMONDO GROUP AB, you can compare the effects of market volatilities on China BlueChemical and CLEMONDO GROUP 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 CLEMONDO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and CLEMONDO GROUP.
Diversification Opportunities for China BlueChemical and CLEMONDO GROUP
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and CLEMONDO is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and CLEMONDO GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEMONDO GROUP AB 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 CLEMONDO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEMONDO GROUP AB has no effect on the direction of China BlueChemical i.e., China BlueChemical and CLEMONDO GROUP go up and down completely randomly.
Pair Corralation between China BlueChemical and CLEMONDO GROUP
Assuming the 90 days horizon China BlueChemical is expected to generate 6.51 times less return on investment than CLEMONDO GROUP. But when comparing it to its historical volatility, China BlueChemical is 2.97 times less risky than CLEMONDO GROUP. It trades about 0.02 of its potential returns per unit of risk. CLEMONDO GROUP AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.34 in CLEMONDO GROUP AB on September 18, 2024 and sell it today you would lose (0.18) from holding CLEMONDO GROUP AB or give up 3.37% 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. CLEMONDO GROUP AB
Performance |
| Timeline |
| China BlueChemical |
| CLEMONDO GROUP AB |
China BlueChemical and CLEMONDO GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and CLEMONDO GROUP
The main advantage of trading using opposite China BlueChemical and CLEMONDO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, CLEMONDO GROUP 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 CLEMONDO GROUP will offset losses from the drop in CLEMONDO GROUP'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 |
| CLEMONDO GROUP vs. UET United Electronic | CLEMONDO GROUP vs. LGI Homes | CLEMONDO GROUP vs. ELECTRONIC ARTS | CLEMONDO GROUP vs. Benchmark Electronics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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