Correlation Between KOBE STEEL and Chuangs China
Can any of the company-specific risk be diversified away by investing in both KOBE STEEL and Chuangs China 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 KOBE STEEL and Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOBE STEEL LTD and Chuangs China Investments, you can compare the effects of market volatilities on KOBE STEEL and Chuangs China 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 KOBE STEEL with a short position of Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOBE STEEL and Chuangs China.
Diversification Opportunities for KOBE STEEL and Chuangs China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KOBE and Chuangs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KOBE STEEL LTD and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments and KOBE STEEL 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 KOBE STEEL LTD are associated (or correlated) with Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of KOBE STEEL i.e., KOBE STEEL and Chuangs China go up and down completely randomly.
Pair Corralation between KOBE STEEL and Chuangs China
If you would invest 975.00 in KOBE STEEL LTD on November 3, 2024 and sell it today you would earn a total of 80.00 from holding KOBE STEEL LTD or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOBE STEEL LTD vs. Chuangs China Investments
Performance |
| Timeline |
| KOBE STEEL LTD |
| Chuangs China Investments |
KOBE STEEL and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOBE STEEL and Chuangs China
The main advantage of trading using opposite KOBE STEEL and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOBE STEEL position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.The idea behind KOBE STEEL LTD and Chuangs China Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Chuangs China vs. Sun Hung Kai | Chuangs China vs. China Overseas Land | Chuangs China vs. CHINA VANKE TD | Chuangs China vs. Longfor Group Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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