Correlation Between China Finance and Key Energy
Can any of the company-specific risk be diversified away by investing in both China Finance and Key Energy 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 Finance and Key Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Finance Online and Key Energy Services, you can compare the effects of market volatilities on China Finance and Key Energy 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 Finance with a short position of Key Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Finance and Key Energy.
Diversification Opportunities for China Finance and Key Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Key is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Finance Online and Key Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Key Energy Services and China Finance 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 Finance Online are associated (or correlated) with Key Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Key Energy Services has no effect on the direction of China Finance i.e., China Finance and Key Energy go up and down completely randomly.
Pair Corralation between China Finance and Key Energy
If you would invest 10.00 in Key Energy Services on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Key Energy Services or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 2.27% |
| Values | Daily Returns |
China Finance Online vs. Key Energy Services
Performance |
| Timeline |
| China Finance Online |
| Key Energy Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Finance and Key Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Finance and Key Energy
The main advantage of trading using opposite China Finance and Key Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Finance position performs unexpectedly, Key Energy 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 Key Energy will offset losses from the drop in Key Energy's long position.| China Finance vs. Morgan Stanley | China Finance vs. Goldman Sachs Group | China Finance vs. Charles Schwab Corp | China Finance vs. Interactive Brokers Group |
| Key Energy vs. Archrock | Key Energy vs. Newpark Resources | Key Energy vs. Bristow Group | Key Energy vs. TechnipFMC 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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