Correlation Between TRADEGATE and China Communications
Can any of the company-specific risk be diversified away by investing in both TRADEGATE and China Communications 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 TRADEGATE and China Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEGATE and China Communications Services, you can compare the effects of market volatilities on TRADEGATE and China Communications 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 TRADEGATE with a short position of China Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and China Communications.
Diversification Opportunities for TRADEGATE and China Communications
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRADEGATE and China is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and China Communications Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Communications and TRADEGATE 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 TRADEGATE are associated (or correlated) with China Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Communications has no effect on the direction of TRADEGATE i.e., TRADEGATE and China Communications go up and down completely randomly.
Pair Corralation between TRADEGATE and China Communications
Assuming the 90 days trading horizon TRADEGATE is expected to generate 394.0 times less return on investment than China Communications. But when comparing it to its historical volatility, TRADEGATE is 11.89 times less risky than China Communications. It trades about 0.0 of its potential returns per unit of risk. China Communications Services is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 47.00 in China Communications Services on August 30, 2024 and sell it today you would earn a total of 1.00 from holding China Communications Services or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEGATE vs. China Communications Services
Performance |
| Timeline |
| TRADEGATE |
| China Communications |
TRADEGATE and China Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEGATE and China Communications
The main advantage of trading using opposite TRADEGATE and China Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE position performs unexpectedly, China Communications 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 Communications will offset losses from the drop in China Communications' long position.| TRADEGATE vs. Apple Inc | TRADEGATE vs. Apple Inc | TRADEGATE vs. Superior Plus Corp | TRADEGATE vs. SIVERS SEMICONDUCTORS AB |
| China Communications vs. AVITA Medical | China Communications vs. TRADEGATE | China Communications vs. Merit Medical Systems | China Communications vs. SAFETY MEDICAL PROD |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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