Correlation Between Strait Innovation and China Express
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By analyzing existing cross correlation between Strait Innovation Internet and China Express Airlines, you can compare the effects of market volatilities on Strait Innovation and China Express 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 Strait Innovation with a short position of China Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strait Innovation and China Express.
Diversification Opportunities for Strait Innovation and China Express
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Strait and China is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Strait Innovation Internet and China Express Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Express Airlines and Strait Innovation 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 Strait Innovation Internet are associated (or correlated) with China Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Express Airlines has no effect on the direction of Strait Innovation i.e., Strait Innovation and China Express go up and down completely randomly.
Pair Corralation between Strait Innovation and China Express
Assuming the 90 days trading horizon Strait Innovation Internet is expected to generate 1.56 times more return on investment than China Express. However, Strait Innovation is 1.56 times more volatile than China Express Airlines. It trades about 0.28 of its potential returns per unit of risk. China Express Airlines is currently generating about 0.22 per unit of risk. If you would invest 147.00 in Strait Innovation Internet on September 22, 2024 and sell it today you would earn a total of 172.00 from holding Strait Innovation Internet or generate 117.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Strait Innovation Internet vs. China Express Airlines
Performance |
Timeline |
Strait Innovation |
China Express Airlines |
Strait Innovation and China Express Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Strait Innovation and China Express
The main advantage of trading using opposite Strait Innovation and China Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strait Innovation position performs unexpectedly, China Express 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 Express will offset losses from the drop in China Express' long position.Strait Innovation vs. Tongxing Environmental Protection | ||
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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