Correlation Between CREMETRSBI DL-001 and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both CREMETRSBI DL-001 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 CREMETRSBI DL-001 and CHINA HUARONG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREMECOMTRSBI DL 001 and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on CREMETRSBI DL-001 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 CREMETRSBI DL-001 with a short position of CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREMETRSBI DL-001 and CHINA HUARONG.
Diversification Opportunities for CREMETRSBI DL-001 and CHINA HUARONG
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CREMETRSBI and CHINA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CREMECOMTRSBI DL 001 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 CREMETRSBI DL-001 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 CREMECOMTRSBI DL 001 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 CREMETRSBI DL-001 i.e., CREMETRSBI DL-001 and CHINA HUARONG go up and down completely randomly.
Pair Corralation between CREMETRSBI DL-001 and CHINA HUARONG
Assuming the 90 days trading horizon CREMETRSBI DL-001 is expected to generate 1.44 times less return on investment than CHINA HUARONG. In addition to that, CREMETRSBI DL-001 is 1.38 times more volatile than CHINA HUARONG ENERHD 50. It trades about 0.05 of its total potential returns per unit of risk. CHINA HUARONG ENERHD 50 is currently generating about 0.1 per unit of volatility. If you would invest 0.15 in CHINA HUARONG ENERHD 50 on October 21, 2024 and sell it today you would lose (0.05) from holding CHINA HUARONG ENERHD 50 or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
CREMECOMTRSBI DL 001 vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| CREMECOMTRSBI DL 001 |
| CHINA HUARONG ENERHD |
CREMETRSBI DL-001 and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREMETRSBI DL-001 and CHINA HUARONG
The main advantage of trading using opposite CREMETRSBI DL-001 and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREMETRSBI DL-001 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.| CREMETRSBI DL-001 vs. JD SPORTS FASH | CREMETRSBI DL-001 vs. Cleanaway Waste Management | CREMETRSBI DL-001 vs. DICKS Sporting Goods | CREMETRSBI DL-001 vs. Coor Service Management |
| CHINA HUARONG vs. Alibaba Group Holding | CHINA HUARONG vs. ConocoPhillips | CHINA HUARONG vs. CNOOC | CHINA HUARONG vs. EOG Resources |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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