Correlation Between USU Software and Chongqing Machinery
Can any of the company-specific risk be diversified away by investing in both USU Software and Chongqing Machinery 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 USU Software and Chongqing Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USU Software AG and Chongqing Machinery Electric, you can compare the effects of market volatilities on USU Software and Chongqing Machinery 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 USU Software with a short position of Chongqing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of USU Software and Chongqing Machinery.
Diversification Opportunities for USU Software and Chongqing Machinery
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between USU and Chongqing is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding USU Software AG and Chongqing Machinery Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Machinery and USU Software 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 USU Software AG are associated (or correlated) with Chongqing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Machinery has no effect on the direction of USU Software i.e., USU Software and Chongqing Machinery go up and down completely randomly.
Pair Corralation between USU Software and Chongqing Machinery
Assuming the 90 days trading horizon USU Software AG is expected to under-perform the Chongqing Machinery. But the stock apears to be less risky and, when comparing its historical volatility, USU Software AG is 2.22 times less risky than Chongqing Machinery. The stock trades about -0.16 of its potential returns per unit of risk. The Chongqing Machinery Electric is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 7.55 in Chongqing Machinery Electric on October 12, 2024 and sell it today you would earn a total of 0.60 from holding Chongqing Machinery Electric or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
USU Software AG vs. Chongqing Machinery Electric
Performance |
| Timeline |
| USU Software AG |
| Chongqing Machinery |
USU Software and Chongqing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USU Software and Chongqing Machinery
The main advantage of trading using opposite USU Software and Chongqing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USU Software position performs unexpectedly, Chongqing Machinery 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 Chongqing Machinery will offset losses from the drop in Chongqing Machinery's long position.| USU Software vs. Accenture plc | USU Software vs. International Business Machines | USU Software vs. Capgemini SE | USU Software vs. FUJITSU LTD ADR |
| Chongqing Machinery vs. INSURANCE AUST GRP | Chongqing Machinery vs. Fortescue Metals Group | Chongqing Machinery vs. SIERRA METALS | Chongqing Machinery vs. QBE Insurance 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |