Correlation Between Key Energy and China Finance
Can any of the company-specific risk be diversified away by investing in both Key Energy and China Finance 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 Key Energy and China Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Key Energy Services and China Finance Online, you can compare the effects of market volatilities on Key Energy and China Finance 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 Key Energy with a short position of China Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Key Energy and China Finance.
Diversification Opportunities for Key Energy and China Finance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Key and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Key Energy Services and China Finance Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Finance Online and Key Energy 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 Key Energy Services are associated (or correlated) with China Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Finance Online has no effect on the direction of Key Energy i.e., Key Energy and China Finance go up and down completely randomly.
Pair Corralation between Key Energy and China Finance
If you would invest 0.01 in China Finance Online on August 26, 2024 and sell it today you would earn a total of 0.00 from holding China Finance Online or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Key Energy Services vs. China Finance Online
Performance |
| Timeline |
| Key Energy Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Finance Online |
Key Energy and China Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Key Energy and China Finance
The main advantage of trading using opposite Key Energy and China Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Key Energy position performs unexpectedly, China Finance 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 Finance will offset losses from the drop in China Finance's long position.| Key Energy vs. Archrock | Key Energy vs. Newpark Resources | Key Energy vs. Bristow Group | Key Energy vs. TechnipFMC PLC |
| China Finance vs. Morgan Stanley | China Finance vs. Goldman Sachs Group | China Finance vs. Charles Schwab Corp | China Finance vs. Interactive Brokers Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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