Correlation Between PACIFIC ONLINE and China Communications
Can any of the company-specific risk be diversified away by investing in both PACIFIC ONLINE and China Communications 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 PACIFIC ONLINE and China Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PACIFIC ONLINE and China Communications Services, you can compare the effects of market volatilities on PACIFIC ONLINE and China Communications 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 PACIFIC ONLINE with a short position of China Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACIFIC ONLINE and China Communications.
Diversification Opportunities for PACIFIC ONLINE and China Communications
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PACIFIC and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC ONLINE and China Communications Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Communications and PACIFIC ONLINE 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 PACIFIC ONLINE are associated (or correlated) with China Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Communications has no effect on the direction of PACIFIC ONLINE i.e., PACIFIC ONLINE and China Communications go up and down completely randomly.
Pair Corralation between PACIFIC ONLINE and China Communications
If you would invest 55.00 in China Communications Services on December 28, 2024 and sell it today you would lose (2.00) from holding China Communications Services or give up 3.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PACIFIC ONLINE vs. China Communications Services
Performance |
Timeline |
PACIFIC ONLINE |
China Communications |
PACIFIC ONLINE and China Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PACIFIC ONLINE and China Communications
The main advantage of trading using opposite PACIFIC ONLINE and China Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC ONLINE position performs unexpectedly, China Communications 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 Communications will offset losses from the drop in China Communications' long position.PACIFIC ONLINE vs. Micron Technology | PACIFIC ONLINE vs. United Utilities Group | PACIFIC ONLINE vs. Canadian Utilities Limited | PACIFIC ONLINE vs. Upland Software |
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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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