Correlation Between SPORTING and Chongqing Machinery
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and Chongqing Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and Chongqing Machinery Electric, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of Chongqing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and Chongqing Machinery.
Diversification Opportunities for SPORTING and Chongqing Machinery
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPORTING and Chongqing is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and Chongqing Machinery Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Machinery and SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and Chongqing Machinery go up and down completely randomly.
Pair Corralation between SPORTING and Chongqing Machinery
Assuming the 90 days trading horizon SPORTING is expected to under-perform the Chongqing Machinery. But the stock apears to be less risky and, when comparing its historical volatility, SPORTING is 3.68 times less risky than Chongqing Machinery. The stock trades about -0.27 of its potential returns per unit of risk. The Chongqing Machinery Electric is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.30 in Chongqing Machinery Electric on August 30, 2024 and sell it today you would earn a total of 0.15 from holding Chongqing Machinery Electric or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORTING vs. Chongqing Machinery Electric
Performance |
| Timeline |
| SPORTING |
| Chongqing Machinery |
SPORTING and Chongqing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and Chongqing Machinery
The main advantage of trading using opposite SPORTING and Chongqing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.| SPORTING vs. Apple Inc | SPORTING vs. Apple Inc | SPORTING vs. Superior Plus Corp | SPORTING vs. SIVERS SEMICONDUCTORS AB |
| Chongqing Machinery vs. ABB | Chongqing Machinery vs. Superior Plus Corp | Chongqing Machinery vs. NMI Holdings | Chongqing Machinery vs. SIVERS SEMICONDUCTORS AB |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |