Correlation Between Chainqui Construction and Farglory Land
Can any of the company-specific risk be diversified away by investing in both Chainqui Construction and Farglory Land 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 Chainqui Construction and Farglory Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainqui Construction Development and Farglory Land Development, you can compare the effects of market volatilities on Chainqui Construction and Farglory Land 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 Chainqui Construction with a short position of Farglory Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainqui Construction and Farglory Land.
Diversification Opportunities for Chainqui Construction and Farglory Land
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chainqui and Farglory is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chainqui Construction Developm and Farglory Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory Land Development and Chainqui Construction 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 Chainqui Construction Development are associated (or correlated) with Farglory Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory Land Development has no effect on the direction of Chainqui Construction i.e., Chainqui Construction and Farglory Land go up and down completely randomly.
Pair Corralation between Chainqui Construction and Farglory Land
Assuming the 90 days trading horizon Chainqui Construction Development is expected to under-perform the Farglory Land. But the stock apears to be less risky and, when comparing its historical volatility, Chainqui Construction Development is 1.66 times less risky than Farglory Land. The stock trades about -0.18 of its potential returns per unit of risk. The Farglory Land Development is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,060 in Farglory Land Development on September 25, 2024 and sell it today you would earn a total of 950.00 from holding Farglory Land Development or generate 13.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chainqui Construction Developm vs. Farglory Land Development
Performance |
Timeline |
Chainqui Construction |
Farglory Land Development |
Chainqui Construction and Farglory Land Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chainqui Construction and Farglory Land
The main advantage of trading using opposite Chainqui Construction and Farglory Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainqui Construction position performs unexpectedly, Farglory Land 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 Farglory Land will offset losses from the drop in Farglory Land's long position.Chainqui Construction vs. Yang Ming Marine | Chainqui Construction vs. Evergreen Marine Corp | Chainqui Construction vs. Eva Airways Corp | Chainqui Construction vs. U Ming Marine Transport |
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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..
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