Correlation Between UNITED UTILITIES and Chuangs China
Can any of the company-specific risk be diversified away by investing in both UNITED UTILITIES and Chuangs China 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 UNITED UTILITIES and Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED UTILITIES GR and Chuangs China Investments, you can compare the effects of market volatilities on UNITED UTILITIES and Chuangs China 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 UNITED UTILITIES with a short position of Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED UTILITIES and Chuangs China.
Diversification Opportunities for UNITED UTILITIES and Chuangs China
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between UNITED and Chuangs is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments and UNITED UTILITIES 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 UNITED UTILITIES GR are associated (or correlated) with Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of UNITED UTILITIES i.e., UNITED UTILITIES and Chuangs China go up and down completely randomly.
Pair Corralation between UNITED UTILITIES and Chuangs China
If you would invest 1.00 in Chuangs China Investments on October 15, 2024 and sell it today you would earn a total of 0.00 from holding Chuangs China Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED UTILITIES GR vs. Chuangs China Investments
Performance |
| Timeline |
| UNITED UTILITIES |
| Chuangs China Investments |
UNITED UTILITIES and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED UTILITIES and Chuangs China
The main advantage of trading using opposite UNITED UTILITIES and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| UNITED UTILITIES vs. PARKEN Sport Entertainment | UNITED UTILITIES vs. MINCO SILVER | UNITED UTILITIES vs. Fortescue Metals Group | UNITED UTILITIES vs. GEAR4MUSIC LS 10 |
| Chuangs China vs. Performance Food Group | Chuangs China vs. UNITED UTILITIES GR | Chuangs China vs. Eidesvik Offshore ASA | Chuangs China vs. Nomad Foods |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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