Correlation Between China De and All Things

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

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

Diversification Opportunities for China De and All Things

-0.23

Correlation Coefficient

China De  All Things

Very good diversification

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

Pair Corralation between China De and All Things

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

China De Xiao  vs.  All Things Mobile

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.

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.

Pair Trading with China De and All Things

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

The idea behind China De Xiao and All Things Mobile 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.