Correlation Between Chengdu Xingrong and Goodwill E

Can any of the company-specific risk be diversified away by investing in both Chengdu Xingrong and Goodwill E 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 Chengdu Xingrong and Goodwill E into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chengdu Xingrong Investment and Goodwill E Health, you can compare the effects of market volatilities on Chengdu Xingrong and Goodwill E 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 Chengdu Xingrong with a short position of Goodwill E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xingrong and Goodwill E.

Diversification Opportunities for Chengdu Xingrong and Goodwill E

0.18

Correlation Coefficient

Chengdu Xingrong  Goodwill E

Average diversification

The 3 months correlation between Chengdu and Goodwill is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xingrong Investment and Goodwill E Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodwill E Health and Chengdu Xingrong 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 Chengdu Xingrong Investment are associated (or correlated) with Goodwill E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodwill E Health has no effect on the direction of Chengdu Xingrong i.e., Chengdu Xingrong and Goodwill E go up and down completely randomly.

Pair Corralation between Chengdu Xingrong and Goodwill E

Assuming the 90 days trading horizon Chengdu Xingrong Investment is expected to generate 0.59 times more return on investment than Goodwill E. However, Chengdu Xingrong Investment is 1.69 times less risky than Goodwill E. It trades about -0.12 of its potential returns per unit of risk. Goodwill E Health is currently generating about -0.3 per unit of risk. If you would invest  738.00  in Chengdu Xingrong Investment on October 22, 2024 and sell it today you would lose (30.00) from holding Chengdu Xingrong Investment or give up 4.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Chengdu Xingrong Investment  vs.  Goodwill E Health

Chengdu Xingrong Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chengdu Xingrong Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Chengdu Xingrong is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goodwill E Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goodwill E Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Chengdu Xingrong and Goodwill E

The main advantage of trading using opposite Chengdu Xingrong and Goodwill E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xingrong position performs unexpectedly, Goodwill E 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 Goodwill E will offset losses from the drop in Goodwill E's long position.

The idea behind Chengdu Xingrong Investment and Goodwill E Health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.