Correlation Between CHINA HUARONG and AP Møller
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG and AP Møller 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 CHINA HUARONG and AP Møller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA HUARONG ENERHD 50 and AP Mller , you can compare the effects of market volatilities on CHINA HUARONG and AP Møller 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 CHINA HUARONG with a short position of AP Møller. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and AP Møller.
Diversification Opportunities for CHINA HUARONG and AP Møller
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and DP4B is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Møller and CHINA HUARONG 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 CHINA HUARONG ENERHD 50 are associated (or correlated) with AP Møller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Møller has no effect on the direction of CHINA HUARONG i.e., CHINA HUARONG and AP Møller go up and down completely randomly.
Pair Corralation between CHINA HUARONG and AP Møller
Assuming the 90 days trading horizon CHINA HUARONG ENERHD 50 is expected to generate 10.45 times more return on investment than AP Møller. However, CHINA HUARONG is 10.45 times more volatile than AP Mller . It trades about 0.14 of its potential returns per unit of risk. AP Mller is currently generating about 0.05 per unit of risk. If you would invest 0.10 in CHINA HUARONG ENERHD 50 on September 12, 2024 and sell it today you would earn a total of 0.05 from holding CHINA HUARONG ENERHD 50 or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. AP Mller
Performance |
| Timeline |
| CHINA HUARONG ENERHD |
| AP Møller |
CHINA HUARONG and AP Møller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA HUARONG and AP Møller
The main advantage of trading using opposite CHINA HUARONG and AP Møller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG position performs unexpectedly, AP Møller 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 AP Møller will offset losses from the drop in AP Møller's long position.| CHINA HUARONG vs. Air Transport Services | CHINA HUARONG vs. Liberty Broadband | CHINA HUARONG vs. TEXAS ROADHOUSE | CHINA HUARONG vs. NORWEGIAN AIR SHUT |
| AP Møller vs. Superior Plus Corp | AP Møller vs. SIVERS SEMICONDUCTORS AB | AP Møller vs. CHINA HUARONG ENERHD 50 | AP Møller vs. NORDIC HALIBUT AS |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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