Correlation Between CarsalesCom and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both CarsalesCom and CHINA HUARONG 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 CarsalesCom and CHINA HUARONG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on CarsalesCom and CHINA HUARONG 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 CarsalesCom with a short position of CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarsalesCom and CHINA HUARONG.
Diversification Opportunities for CarsalesCom and CHINA HUARONG
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between CarsalesCom and CHINA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD and CarsalesCom 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 CarsalesCom are associated (or correlated) with CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of CarsalesCom i.e., CarsalesCom and CHINA HUARONG go up and down completely randomly.
Pair Corralation between CarsalesCom and CHINA HUARONG
Assuming the 90 days horizon CarsalesCom is expected to generate 0.1 times more return on investment than CHINA HUARONG. However, CarsalesCom is 9.95 times less risky than CHINA HUARONG. It trades about -0.1 of its potential returns per unit of risk. CHINA HUARONG ENERHD 50 is currently generating about -0.03 per unit of risk. If you would invest 2,420 in CarsalesCom on September 14, 2024 and sell it today you would lose (80.00) from holding CarsalesCom or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| CarsalesCom |
| CHINA HUARONG ENERHD |
CarsalesCom and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarsalesCom and CHINA HUARONG
The main advantage of trading using opposite CarsalesCom and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom position performs unexpectedly, CHINA HUARONG 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 HUARONG will offset losses from the drop in CHINA HUARONG's long position.| CarsalesCom vs. Tencent Holdings | CarsalesCom vs. Superior Plus Corp | CarsalesCom vs. SIVERS SEMICONDUCTORS AB | CarsalesCom vs. NorAm Drilling AS |
| CHINA HUARONG vs. Scandinavian Tobacco Group | CHINA HUARONG vs. Zoom Video Communications | CHINA HUARONG vs. WillScot Mobile Mini | CHINA HUARONG vs. Zurich Insurance Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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