Correlation Between CHINA HUARONG and UTD OV
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG and UTD OV 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 UTD OV 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 UTD OV BK LOC ADR1, you can compare the effects of market volatilities on CHINA HUARONG and UTD OV 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 UTD OV. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and UTD OV.
Diversification Opportunities for CHINA HUARONG and UTD OV
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CHINA and UTD is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 and UTD OV BK LOC ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTD OV BK 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 UTD OV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTD OV BK has no effect on the direction of CHINA HUARONG i.e., CHINA HUARONG and UTD OV go up and down completely randomly.
Pair Corralation between CHINA HUARONG and UTD OV
Assuming the 90 days trading horizon CHINA HUARONG ENERHD 50 is expected to under-perform the UTD OV. In addition to that, CHINA HUARONG is 16.69 times more volatile than UTD OV BK LOC ADR1. It trades about -0.03 of its total potential returns per unit of risk. UTD OV BK LOC ADR1 is currently generating about 0.28 per unit of volatility. If you would invest 4,940 in UTD OV BK LOC ADR1 on September 14, 2024 and sell it today you would earn a total of 260.00 from holding UTD OV BK LOC ADR1 or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. UTD OV BK LOC ADR1
Performance |
| Timeline |
| CHINA HUARONG ENERHD |
| UTD OV BK |
CHINA HUARONG and UTD OV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA HUARONG and UTD OV
The main advantage of trading using opposite CHINA HUARONG and UTD OV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG position performs unexpectedly, UTD OV 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 UTD OV will offset losses from the drop in UTD OV's long position.| CHINA HUARONG vs. Scandinavian Tobacco Group | CHINA HUARONG vs. Zoom Video Communications | CHINA HUARONG vs. WillScot Mobile Mini | CHINA HUARONG vs. Zurich Insurance Group |
| UTD OV vs. CVS Health | UTD OV vs. GUARDANT HEALTH CL | UTD OV vs. COMMERCIAL VEHICLE | UTD OV vs. CarsalesCom |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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