Correlation Between RoadMain T and Chengdu Spaceon

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Can any of the company-specific risk be diversified away by investing in both RoadMain T and Chengdu Spaceon 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 RoadMain T and Chengdu Spaceon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RoadMain T Co and Chengdu Spaceon Electronics, you can compare the effects of market volatilities on RoadMain T and Chengdu Spaceon 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 RoadMain T with a short position of Chengdu Spaceon. Check out your portfolio center. Please also check ongoing floating volatility patterns of RoadMain T and Chengdu Spaceon.

Diversification Opportunities for RoadMain T and Chengdu Spaceon

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between RoadMain and Chengdu is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding RoadMain T Co and Chengdu Spaceon Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Spaceon Elec and RoadMain T 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 RoadMain T Co are associated (or correlated) with Chengdu Spaceon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Spaceon Elec has no effect on the direction of RoadMain T i.e., RoadMain T and Chengdu Spaceon go up and down completely randomly.

Pair Corralation between RoadMain T and Chengdu Spaceon

Assuming the 90 days trading horizon RoadMain T is expected to generate 3.09 times less return on investment than Chengdu Spaceon. In addition to that, RoadMain T is 1.12 times more volatile than Chengdu Spaceon Electronics. It trades about 0.02 of its total potential returns per unit of risk. Chengdu Spaceon Electronics is currently generating about 0.07 per unit of volatility. If you would invest  1,538  in Chengdu Spaceon Electronics on September 28, 2024 and sell it today you would earn a total of  160.00  from holding Chengdu Spaceon Electronics or generate 10.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

RoadMain T Co  vs.  Chengdu Spaceon Electronics

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 010203040
JavaScript chart by amCharts 3.21.15603860 002935
       Timeline  
RoadMain T 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in RoadMain T Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, RoadMain T is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec26283032343638
Chengdu Spaceon Elec 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Chengdu Spaceon Electronics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chengdu Spaceon sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec131415161718

RoadMain T and Chengdu Spaceon Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.42-8.55-5.69-2.820.02.935.98.8711.85 0.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15603860 002935
       Returns  

Pair Trading with RoadMain T and Chengdu Spaceon

The main advantage of trading using opposite RoadMain T and Chengdu Spaceon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RoadMain T position performs unexpectedly, Chengdu Spaceon 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 Chengdu Spaceon will offset losses from the drop in Chengdu Spaceon's long position.
The idea behind RoadMain T Co and Chengdu Spaceon Electronics 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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