Correlation Between SIEM OFFSHORE and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both SIEM OFFSHORE and CHINA EDUCATION 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 SIEM OFFSHORE and CHINA EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIEM OFFSHORE NEW and CHINA EDUCATION GROUP, you can compare the effects of market volatilities on SIEM OFFSHORE and CHINA EDUCATION 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 SIEM OFFSHORE with a short position of CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEM OFFSHORE and CHINA EDUCATION.
Diversification Opportunities for SIEM OFFSHORE and CHINA EDUCATION
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between SIEM and CHINA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP and SIEM OFFSHORE 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 SIEM OFFSHORE NEW are associated (or correlated) with CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between SIEM OFFSHORE and CHINA EDUCATION
Assuming the 90 days trading horizon SIEM OFFSHORE NEW is expected to generate 0.62 times more return on investment than CHINA EDUCATION. However, SIEM OFFSHORE NEW is 1.63 times less risky than CHINA EDUCATION. It trades about -0.07 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.14 per unit of risk. If you would invest 231.00 in SIEM OFFSHORE NEW on September 28, 2024 and sell it today you would lose (27.00) from holding SIEM OFFSHORE NEW or give up 11.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIEM OFFSHORE NEW vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| SIEM OFFSHORE NEW |
| CHINA EDUCATION GROUP |
SIEM OFFSHORE and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEM OFFSHORE and CHINA EDUCATION
The main advantage of trading using opposite SIEM OFFSHORE and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEM OFFSHORE position performs unexpectedly, CHINA EDUCATION 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 EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.The idea behind SIEM OFFSHORE NEW and CHINA EDUCATION GROUP 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.| CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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