Correlation Between REINET INVESTMENTS and CHINA SOUTHN
Can any of the company-specific risk be diversified away by investing in both REINET INVESTMENTS and CHINA SOUTHN 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 REINET INVESTMENTS and CHINA SOUTHN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REINET INVESTMENTS SCA and CHINA SOUTHN AIR H , you can compare the effects of market volatilities on REINET INVESTMENTS and CHINA SOUTHN 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 REINET INVESTMENTS with a short position of CHINA SOUTHN. Check out your portfolio center. Please also check ongoing floating volatility patterns of REINET INVESTMENTS and CHINA SOUTHN.
Diversification Opportunities for REINET INVESTMENTS and CHINA SOUTHN
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REINET and CHINA is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding REINET INVESTMENTS SCA and CHINA SOUTHN AIR H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SOUTHN AIR and REINET INVESTMENTS 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 REINET INVESTMENTS SCA are associated (or correlated) with CHINA SOUTHN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SOUTHN AIR has no effect on the direction of REINET INVESTMENTS i.e., REINET INVESTMENTS and CHINA SOUTHN go up and down completely randomly.
Pair Corralation between REINET INVESTMENTS and CHINA SOUTHN
Assuming the 90 days horizon REINET INVESTMENTS SCA is expected to generate 1.1 times more return on investment than CHINA SOUTHN. However, REINET INVESTMENTS is 1.1 times more volatile than CHINA SOUTHN AIR H . It trades about 0.05 of its potential returns per unit of risk. CHINA SOUTHN AIR H is currently generating about -0.06 per unit of risk. If you would invest 2,360 in REINET INVESTMENTS SCA on November 5, 2024 and sell it today you would earn a total of 60.00 from holding REINET INVESTMENTS SCA or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REINET INVESTMENTS SCA vs. CHINA SOUTHN AIR H
Performance |
| Timeline |
| REINET INVESTMENTS SCA |
| CHINA SOUTHN AIR |
REINET INVESTMENTS and CHINA SOUTHN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REINET INVESTMENTS and CHINA SOUTHN
The main advantage of trading using opposite REINET INVESTMENTS and CHINA SOUTHN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REINET INVESTMENTS position performs unexpectedly, CHINA SOUTHN 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 SOUTHN will offset losses from the drop in CHINA SOUTHN's long position.| REINET INVESTMENTS vs. Direct Line Insurance | REINET INVESTMENTS vs. CAREER EDUCATION | REINET INVESTMENTS vs. Reinsurance Group of | REINET INVESTMENTS vs. Safety Insurance Group |
| CHINA SOUTHN vs. AIR LIQUIDE ADR | CHINA SOUTHN vs. Delta Air Lines | CHINA SOUTHN vs. Westinghouse Air Brake | CHINA SOUTHN vs. Easy Software AG |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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