Correlation Between Caihong Display and Duzhe Publishing
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By analyzing existing cross correlation between Caihong Display Devices and Duzhe Publishing Media, you can compare the effects of market volatilities on Caihong Display and Duzhe Publishing 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 Caihong Display with a short position of Duzhe Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Duzhe Publishing.
Diversification Opportunities for Caihong Display and Duzhe Publishing
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caihong and Duzhe is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Duzhe Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duzhe Publishing Media and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Duzhe Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duzhe Publishing Media has no effect on the direction of Caihong Display i.e., Caihong Display and Duzhe Publishing go up and down completely randomly.
Pair Corralation between Caihong Display and Duzhe Publishing
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 0.84 times more return on investment than Duzhe Publishing. However, Caihong Display Devices is 1.19 times less risky than Duzhe Publishing. It trades about 0.17 of its potential returns per unit of risk. Duzhe Publishing Media is currently generating about 0.12 per unit of risk. If you would invest 625.00 in Caihong Display Devices on September 25, 2024 and sell it today you would earn a total of 205.00 from holding Caihong Display Devices or generate 32.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Caihong Display Devices vs. Duzhe Publishing Media
Performance |
Timeline |
Caihong Display Devices |
Duzhe Publishing Media |
Caihong Display and Duzhe Publishing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caihong Display and Duzhe Publishing
The main advantage of trading using opposite Caihong Display and Duzhe Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Duzhe Publishing 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 Duzhe Publishing will offset losses from the drop in Duzhe Publishing's long position.Caihong Display vs. Industrial and Commercial | Caihong Display vs. China Construction Bank | Caihong Display vs. Agricultural Bank of | Caihong Display vs. Bank of China |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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