Correlation Between All Things and China De

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

By analyzing existing cross correlation between All Things Mobile and China De Xiao, you can compare the effects of market volatilities on All Things and China De 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 All Things with a short position of China De. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Things and China De.

Diversification Opportunities for All Things and China De

-0.23

Correlation Coefficient

All Things  China De

Very good diversification

The 3 months correlation between All and China is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding All Things Mobile and China De Xiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China De Xiao and All Things 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 All Things Mobile are associated (or correlated) with China De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China De Xiao has no effect on the direction of All Things i.e., All Things and China De go up and down completely randomly.

Pair Corralation between All Things and China De

If you would invest  5.49  in All Things Mobile on December 18, 2024 and sell it today you would lose (0.10) from holding All Things Mobile or give up 1.82% of portfolio value over 90 days.

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

All Things Mobile  vs.  China De Xiao

All Things Mobile

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in All Things Mobile are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, All Things may actually be approaching a critical reversion point that can send shares even higher in April 2025.

China De Xiao

Risk-Adjusted Performance

Very Weak

Over the last 90 days China De Xiao has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, China De is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with All Things and China De

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

The idea behind All Things Mobile and China De Xiao 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.