Correlation Between IND+COMMBK CHINA and CODERE ONLINE
Can any of the company-specific risk be diversified away by investing in both IND+COMMBK CHINA and CODERE ONLINE 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 IND+COMMBK CHINA and CODERE ONLINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDCOMMBK CHINA ADR20 and CODERE ONLINE LUX, you can compare the effects of market volatilities on IND+COMMBK CHINA and CODERE ONLINE 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 IND+COMMBK CHINA with a short position of CODERE ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IND+COMMBK CHINA and CODERE ONLINE.
Diversification Opportunities for IND+COMMBK CHINA and CODERE ONLINE
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between IND+COMMBK and CODERE is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding INDCOMMBK CHINA ADR20 and CODERE ONLINE LUX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CODERE ONLINE LUX and IND+COMMBK CHINA 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 INDCOMMBK CHINA ADR20 are associated (or correlated) with CODERE ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CODERE ONLINE LUX has no effect on the direction of IND+COMMBK CHINA i.e., IND+COMMBK CHINA and CODERE ONLINE go up and down completely randomly.
Pair Corralation between IND+COMMBK CHINA and CODERE ONLINE
Assuming the 90 days trading horizon INDCOMMBK CHINA ADR20 is expected to generate 1.09 times more return on investment than CODERE ONLINE. However, IND+COMMBK CHINA is 1.09 times more volatile than CODERE ONLINE LUX. It trades about 0.13 of its potential returns per unit of risk. CODERE ONLINE LUX is currently generating about 0.05 per unit of risk. If you would invest 960.00 in INDCOMMBK CHINA ADR20 on September 4, 2024 and sell it today you would earn a total of 220.00 from holding INDCOMMBK CHINA ADR20 or generate 22.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDCOMMBK CHINA ADR20 vs. CODERE ONLINE LUX
Performance |
| Timeline |
| INDCOMMBK CHINA ADR20 |
| CODERE ONLINE LUX |
IND+COMMBK CHINA and CODERE ONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IND+COMMBK CHINA and CODERE ONLINE
The main advantage of trading using opposite IND+COMMBK CHINA and CODERE ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IND+COMMBK CHINA position performs unexpectedly, CODERE ONLINE 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 CODERE ONLINE will offset losses from the drop in CODERE ONLINE's long position.| IND+COMMBK CHINA vs. CODERE ONLINE LUX | IND+COMMBK CHINA vs. DXC Technology Co | IND+COMMBK CHINA vs. SCOTT TECHNOLOGY | IND+COMMBK CHINA vs. Micron Technology |
| CODERE ONLINE vs. NISSIN FOODS HLDGS | CODERE ONLINE vs. CVW CLEANTECH INC | CODERE ONLINE vs. United Natural Foods | CODERE ONLINE vs. COFCO Joycome Foods |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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