Correlation Between Aqua Power and China Teletech
Can any of the company-specific risk be diversified away by investing in both Aqua Power and China Teletech 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 Aqua Power and China Teletech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqua Power Systems and China Teletech Holding, you can compare the effects of market volatilities on Aqua Power and China Teletech 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 Aqua Power with a short position of China Teletech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqua Power and China Teletech.
Diversification Opportunities for Aqua Power and China Teletech
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aqua and China is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Power Systems and China Teletech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Teletech Holding and Aqua Power 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 Aqua Power Systems are associated (or correlated) with China Teletech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Teletech Holding has no effect on the direction of Aqua Power i.e., Aqua Power and China Teletech go up and down completely randomly.
Pair Corralation between Aqua Power and China Teletech
Given the investment horizon of 90 days Aqua Power is expected to generate 40.95 times less return on investment than China Teletech. But when comparing it to its historical volatility, Aqua Power Systems is 11.39 times less risky than China Teletech. It trades about 0.04 of its potential returns per unit of risk. China Teletech Holding is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.16 in China Teletech Holding on December 5, 2024 and sell it today you would earn a total of 20,000 from holding China Teletech Holding or generate 1.24999E7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 47.37% |
Values | Daily Returns |
Aqua Power Systems vs. China Teletech Holding
Performance |
Timeline |
Aqua Power Systems |
China Teletech Holding |
Aqua Power and China Teletech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aqua Power and China Teletech
The main advantage of trading using opposite Aqua Power and China Teletech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqua Power position performs unexpectedly, China Teletech 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 Teletech will offset losses from the drop in China Teletech's long position.Aqua Power vs. Nextmart | Aqua Power vs. Good Vibrations Shoes | Aqua Power vs. Genesis Electronics Group | Aqua Power vs. Harrison Vickers and |
China Teletech vs. Oncologix Tech | China Teletech vs. Aqua Power Systems | China Teletech vs. TransAKT | China Teletech vs. China Health Management |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |