Correlation Between Inflection Point and China Gas
Can any of the company-specific risk be diversified away by investing in both Inflection Point and China Gas 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 Inflection Point and China Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and China Gas Holdings, you can compare the effects of market volatilities on Inflection Point and China Gas 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 Inflection Point with a short position of China Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and China Gas.
Diversification Opportunities for Inflection Point and China Gas
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inflection and China is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and China Gas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Gas Holdings and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with China Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Gas Holdings has no effect on the direction of Inflection Point i.e., Inflection Point and China Gas go up and down completely randomly.
Pair Corralation between Inflection Point and China Gas
Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 6.11 times more return on investment than China Gas. However, Inflection Point is 6.11 times more volatile than China Gas Holdings. It trades about -0.01 of its potential returns per unit of risk. China Gas Holdings is currently generating about -0.22 per unit of risk. If you would invest 1,335 in Inflection Point Acquisition on October 20, 2024 and sell it today you would lose (40.00) from holding Inflection Point Acquisition or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflection Point Acquisition vs. China Gas Holdings
Performance |
| Timeline |
| Inflection Point Acq |
| China Gas Holdings |
Inflection Point and China Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and China Gas
The main advantage of trading using opposite Inflection Point and China Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point position performs unexpectedly, China Gas 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 China Gas will offset losses from the drop in China Gas' long position.| Inflection Point vs. John B Sanfilippo | Inflection Point vs. FitLife Brands, Common | Inflection Point vs. Vital Farms | Inflection Point vs. Valneva SE ADR |
| China Gas vs. Grocery Outlet Holding | China Gas vs. Games Workshop Group | China Gas vs. Boyd Gaming | China Gas vs. Hochschild Mining PLC |
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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