Correlation Between China BlueChemical and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and Vastned Retail 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 Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and Vastned Retail NV, you can compare the effects of market volatilities on China BlueChemical and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and Vastned Retail.
Diversification Opportunities for China BlueChemical and Vastned Retail
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Vastned is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of China BlueChemical i.e., China BlueChemical and Vastned Retail go up and down completely randomly.
Pair Corralation between China BlueChemical and Vastned Retail
Assuming the 90 days horizon China BlueChemical is expected to generate 4.76 times more return on investment than Vastned Retail. However, China BlueChemical is 4.76 times more volatile than Vastned Retail NV. It trades about 0.11 of its potential returns per unit of risk. Vastned Retail NV is currently generating about -0.11 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. Vastned Retail NV
Performance |
| Timeline |
| China BlueChemical |
| Vastned Retail NV |
China BlueChemical and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and Vastned Retail
The main advantage of trading using opposite China BlueChemical and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail'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 |
| Vastned Retail vs. Guidewire Software | Vastned Retail vs. Evolution Mining Limited | Vastned Retail vs. TAL Education Group | Vastned Retail vs. MAGIC SOFTWARE ENTR |
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 Stocks Directory module to find actively traded stocks across global markets.
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