Correlation Between Changzhou Almaden and 360 Security

Can any of the company-specific risk be diversified away by investing in both Changzhou Almaden and 360 Security 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 Changzhou Almaden and 360 Security into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Changzhou Almaden Co and 360 Security Technology, you can compare the effects of market volatilities on Changzhou Almaden and 360 Security 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 Changzhou Almaden with a short position of 360 Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changzhou Almaden and 360 Security.

Diversification Opportunities for Changzhou Almaden and 360 Security

0.23

Correlation Coefficient

Changzhou Almaden  360 Security

Modest diversification

The 3 months correlation between Changzhou and 360 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Changzhou Almaden Co and 360 Security Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Security Technology and Changzhou Almaden 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 Changzhou Almaden Co are associated (or correlated) with 360 Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 Security Technology has no effect on the direction of Changzhou Almaden i.e., Changzhou Almaden and 360 Security go up and down completely randomly.

Pair Corralation between Changzhou Almaden and 360 Security

Assuming the 90 days trading horizon Changzhou Almaden Co is expected to under-perform the 360 Security. But the stock apears to be less risky and, when comparing its historical volatility, Changzhou Almaden Co is 1.82 times less risky than 360 Security. The stock trades about -0.13 of its potential returns per unit of risk. The 360 Security Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  960.00  in 360 Security Technology on October 7, 2024 and sell it today you would lose (19.00) from holding 360 Security Technology or give up 1.98% of portfolio value over 90 days.

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

Changzhou Almaden Co  vs.  360 Security Technology

Changzhou Almaden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Changzhou Almaden Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

360 Security Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 360 Security Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 360 Security is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Changzhou Almaden and 360 Security

The main advantage of trading using opposite Changzhou Almaden and 360 Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changzhou Almaden position performs unexpectedly, 360 Security 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 360 Security will offset losses from the drop in 360 Security's long position.

The idea behind Changzhou Almaden Co and 360 Security Technology 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..