Correlation Between Highlight Communications and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and Chengdu PUTIAN 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 Highlight Communications and Chengdu PUTIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on Highlight Communications and Chengdu PUTIAN 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 Highlight Communications with a short position of Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Chengdu PUTIAN.
Diversification Opportunities for Highlight Communications and Chengdu PUTIAN
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highlight and Chengdu is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec and Highlight Communications 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 Highlight Communications AG are associated (or correlated) with Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of Highlight Communications i.e., Highlight Communications and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between Highlight Communications and Chengdu PUTIAN
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the Chengdu PUTIAN. But the stock apears to be less risky and, when comparing its historical volatility, Highlight Communications AG is 2.76 times less risky than Chengdu PUTIAN. The stock trades about -0.05 of its potential returns per unit of risk. The Chengdu PUTIAN Telecommunications is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.65 in Chengdu PUTIAN Telecommunications on October 20, 2024 and sell it today you would earn a total of 1.35 from holding Chengdu PUTIAN Telecommunications or generate 20.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| Highlight Communications |
| Chengdu PUTIAN Telec |
Highlight Communications and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Chengdu PUTIAN
The main advantage of trading using opposite Highlight Communications and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN's long position.| Highlight Communications vs. The Yokohama Rubber | Highlight Communications vs. THRACE PLASTICS | Highlight Communications vs. NEWELL RUBBERMAID | Highlight Communications vs. ALBIS LEASING AG |
| Chengdu PUTIAN vs. HEMISPHERE EGY | Chengdu PUTIAN vs. H2O Retailing | Chengdu PUTIAN vs. Costco Wholesale Corp | Chengdu PUTIAN vs. AEON STORES |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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