Correlation Between Changjiang Publishing and China Singapore

Can any of the company-specific risk be diversified away by investing in both Changjiang Publishing and China Singapore 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 Changjiang Publishing and China Singapore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Changjiang Publishing Media and China Singapore Suzhou Industrial, you can compare the effects of market volatilities on Changjiang Publishing and China Singapore 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 Changjiang Publishing with a short position of China Singapore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Publishing and China Singapore.

Diversification Opportunities for Changjiang Publishing and China Singapore

0.07

Correlation Coefficient

Changjiang Publishing  China Singapore

Significant diversification

The 3 months correlation between Changjiang and China is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Publishing Media and China Singapore Suzhou Industr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Singapore Suzhou and Changjiang Publishing 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 Changjiang Publishing Media are associated (or correlated) with China Singapore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Singapore Suzhou has no effect on the direction of Changjiang Publishing i.e., Changjiang Publishing and China Singapore go up and down completely randomly.

Pair Corralation between Changjiang Publishing and China Singapore

Assuming the 90 days trading horizon Changjiang Publishing Media is expected to under-perform the China Singapore. But the stock apears to be less risky and, when comparing its historical volatility, Changjiang Publishing Media is 1.07 times less risky than China Singapore. The stock trades about -0.12 of its potential returns per unit of risk. The China Singapore Suzhou Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  768.00  in China Singapore Suzhou Industrial on December 26, 2024 and sell it today you would earn a total of  9.00  from holding China Singapore Suzhou Industrial or generate 1.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Changjiang Publishing Media  vs.  China Singapore Suzhou Industr

Changjiang Publishing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Changjiang Publishing Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

China Singapore Suzhou

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Singapore Suzhou Industrial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, China Singapore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Changjiang Publishing and China Singapore

The main advantage of trading using opposite Changjiang Publishing and China Singapore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Publishing position performs unexpectedly, China Singapore 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 Singapore will offset losses from the drop in China Singapore's long position.

The idea behind Changjiang Publishing Media and China Singapore Suzhou Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.