Correlation Between AURUBIS AG and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both AURUBIS AG and Chengdu PUTIAN 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 AURUBIS AG and Chengdu PUTIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AURUBIS AG UNSPADR and Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on AURUBIS AG and Chengdu PUTIAN 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 AURUBIS AG with a short position of Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of AURUBIS AG and Chengdu PUTIAN.
Diversification Opportunities for AURUBIS AG and Chengdu PUTIAN
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AURUBIS and Chengdu is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding AURUBIS AG UNSPADR and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec and AURUBIS AG 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 AURUBIS AG UNSPADR are associated (or correlated) with Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of AURUBIS AG i.e., AURUBIS AG and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between AURUBIS AG and Chengdu PUTIAN
Assuming the 90 days trading horizon AURUBIS AG UNSPADR is expected to under-perform the Chengdu PUTIAN. But the stock apears to be less risky and, when comparing its historical volatility, AURUBIS AG UNSPADR is 2.15 times less risky than Chengdu PUTIAN. The stock trades about -0.01 of its potential returns per unit of risk. The Chengdu PUTIAN Telecommunications is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7.05 in Chengdu PUTIAN Telecommunications on October 24, 2024 and sell it today you would earn a total of 0.70 from holding Chengdu PUTIAN Telecommunications or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
AURUBIS AG UNSPADR vs. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| AURUBIS AG UNSPADR |
| Chengdu PUTIAN Telec |
AURUBIS AG and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AURUBIS AG and Chengdu PUTIAN
The main advantage of trading using opposite AURUBIS AG and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AURUBIS AG position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN's long position.| AURUBIS AG vs. Chengdu PUTIAN Telecommunications | AURUBIS AG vs. CITIC Telecom International | AURUBIS AG vs. HUTCHISON TELECOMM | AURUBIS AG vs. ecotel communication ag |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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