Correlation Between United States and China Clean
Can any of the company-specific risk be diversified away by investing in both United States and China Clean 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 States and China Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and China Clean Energy, you can compare the effects of market volatilities on United States and China Clean 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 States with a short position of China Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and China Clean.
Diversification Opportunities for United States and China Clean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and China Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Clean Energy and United States 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 States Steel are associated (or correlated) with China Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Clean Energy has no effect on the direction of United States i.e., United States and China Clean go up and down completely randomly.
Pair Corralation between United States and China Clean
If you would invest 3,099 in United States Steel on August 29, 2024 and sell it today you would earn a total of 946.00 from holding United States Steel or generate 30.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. China Clean Energy
Performance |
| Timeline |
| United States Steel |
| China Clean Energy |
United States and China Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and China Clean
The main advantage of trading using opposite United States and China Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, China Clean 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 Clean will offset losses from the drop in China Clean's long position.| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
| China Clean vs. Akzo Nobel NV | China Clean vs. Avoca LLC | China Clean vs. Arkema SA ADR | China Clean vs. HUMANA INC |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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