Correlation Between Aba Chemicals and Fujian Boss
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By analyzing existing cross correlation between Aba Chemicals Corp and Fujian Boss Software, you can compare the effects of market volatilities on Aba Chemicals and Fujian Boss 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 Aba Chemicals with a short position of Fujian Boss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Fujian Boss.
Diversification Opportunities for Aba Chemicals and Fujian Boss
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aba and Fujian is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Fujian Boss Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Boss Software and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Fujian Boss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Boss Software has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Fujian Boss go up and down completely randomly.
Pair Corralation between Aba Chemicals and Fujian Boss
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Fujian Boss. But the stock apears to be less risky and, when comparing its historical volatility, Aba Chemicals Corp is 1.21 times less risky than Fujian Boss. The stock trades about -0.56 of its potential returns per unit of risk. The Fujian Boss Software is currently generating about -0.4 of returns per unit of risk over similar time horizon. If you would invest 1,760 in Fujian Boss Software on October 7, 2024 and sell it today you would lose (323.00) from holding Fujian Boss Software or give up 18.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Aba Chemicals Corp vs. Fujian Boss Software
Performance |
Timeline |
Aba Chemicals Corp |
Fujian Boss Software |
Aba Chemicals and Fujian Boss Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aba Chemicals and Fujian Boss
The main advantage of trading using opposite Aba Chemicals and Fujian Boss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Fujian Boss 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 Fujian Boss will offset losses from the drop in Fujian Boss' long position.Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Hoshine Silicon Ind |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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