Correlation Between Chinese Gamer and Ingentec
Can any of the company-specific risk be diversified away by investing in both Chinese Gamer and Ingentec 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 Chinese Gamer and Ingentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Gamer International and Ingentec, you can compare the effects of market volatilities on Chinese Gamer and Ingentec 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 Chinese Gamer with a short position of Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and Ingentec.
Diversification Opportunities for Chinese Gamer and Ingentec
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chinese and Ingentec is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec and Chinese Gamer 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 Chinese Gamer International are associated (or correlated) with Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of Chinese Gamer i.e., Chinese Gamer and Ingentec go up and down completely randomly.
Pair Corralation between Chinese Gamer and Ingentec
Assuming the 90 days trading horizon Chinese Gamer International is expected to generate 0.64 times more return on investment than Ingentec. However, Chinese Gamer International is 1.57 times less risky than Ingentec. It trades about -0.04 of its potential returns per unit of risk. Ingentec is currently generating about -0.24 per unit of risk. If you would invest 4,420 in Chinese Gamer International on November 19, 2024 and sell it today you would lose (130.00) from holding Chinese Gamer International or give up 2.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Chinese Gamer International vs. Ingentec
Performance |
Timeline |
Chinese Gamer Intern |
Ingentec |
Chinese Gamer and Ingentec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chinese Gamer and Ingentec
The main advantage of trading using opposite Chinese Gamer and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Gamer position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec's long position.Chinese Gamer vs. Alchip Technologies | ||
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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