Correlation Between China BlueChemical and CVW CLEANTECH
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and CVW CLEANTECH 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 CVW CLEANTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and CVW CLEANTECH INC, you can compare the effects of market volatilities on China BlueChemical and CVW CLEANTECH 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 CVW CLEANTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and CVW CLEANTECH.
Diversification Opportunities for China BlueChemical and CVW CLEANTECH
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and CVW is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and CVW CLEANTECH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CLEANTECH INC 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 CVW CLEANTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CLEANTECH INC has no effect on the direction of China BlueChemical i.e., China BlueChemical and CVW CLEANTECH go up and down completely randomly.
Pair Corralation between China BlueChemical and CVW CLEANTECH
Assuming the 90 days horizon China BlueChemical is expected to generate 0.77 times more return on investment than CVW CLEANTECH. However, China BlueChemical is 1.3 times less risky than CVW CLEANTECH. It trades about 0.03 of its potential returns per unit of risk. CVW CLEANTECH INC is currently generating about 0.02 per unit of risk. If you would invest 23.00 in China BlueChemical on October 27, 2024 and sell it today you would earn a total of 4.00 from holding China BlueChemical or generate 17.39% 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. CVW CLEANTECH INC
Performance |
| Timeline |
| China BlueChemical |
| CVW CLEANTECH INC |
China BlueChemical and CVW CLEANTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and CVW CLEANTECH
The main advantage of trading using opposite China BlueChemical and CVW CLEANTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, CVW CLEANTECH 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 CVW CLEANTECH will offset losses from the drop in CVW CLEANTECH's long position.| China BlueChemical vs. Chengdu PUTIAN Telecommunications | China BlueChemical vs. X FAB Silicon Foundries | China BlueChemical vs. Tower One Wireless | China BlueChemical vs. TRI CHEMICAL LABORATINC |
| CVW CLEANTECH vs. Zoom Video Communications | CVW CLEANTECH vs. Chunghwa Telecom Co | CVW CLEANTECH vs. TELECOM ITALIA | CVW CLEANTECH vs. Ribbon Communications |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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