Correlation Between De Rucci and China Publishing

Can any of the company-specific risk be diversified away by investing in both De Rucci and China Publishing 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 De Rucci and China Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between De Rucci Healthy and China Publishing Media, you can compare the effects of market volatilities on De Rucci and China Publishing 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 De Rucci with a short position of China Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Rucci and China Publishing.

Diversification Opportunities for De Rucci and China Publishing

0.79

Correlation Coefficient

De Rucci  China Publishing

Poor diversification

The 3 months correlation between 001323 and China is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding De Rucci Healthy and China Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Publishing Media and De Rucci 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 De Rucci Healthy are associated (or correlated) with China Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Publishing Media has no effect on the direction of De Rucci i.e., De Rucci and China Publishing go up and down completely randomly.

Pair Corralation between De Rucci and China Publishing

Assuming the 90 days trading horizon De Rucci is expected to generate 2.52 times less return on investment than China Publishing. But when comparing it to its historical volatility, De Rucci Healthy is 1.64 times less risky than China Publishing. It trades about 0.03 of its potential returns per unit of risk. China Publishing Media is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  495.00  in China Publishing Media on September 20, 2024 and sell it today you would earn a total of  320.00  from holding China Publishing Media or generate 64.65% return on investment over 90 days.

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

De Rucci Healthy  vs.  China Publishing Media

De Rucci Healthy

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in De Rucci Healthy are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, De Rucci sustained solid returns over the last few months and may actually be approaching a breakup point.

China Publishing Media

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in China Publishing Media are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, China Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with De Rucci and China Publishing

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

The idea behind De Rucci Healthy and China Publishing Media 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.