Correlation Between Chongqing Machinery and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery and GOLD ROAD 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 Chongqing Machinery and GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chongqing Machinery Electric and GOLD ROAD RES, you can compare the effects of market volatilities on Chongqing Machinery and GOLD ROAD 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 Chongqing Machinery with a short position of GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and GOLD ROAD.
Diversification Opportunities for Chongqing Machinery and GOLD ROAD
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chongqing and GOLD is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES and Chongqing Machinery 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 Chongqing Machinery Electric are associated (or correlated) with GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of Chongqing Machinery i.e., Chongqing Machinery and GOLD ROAD go up and down completely randomly.
Pair Corralation between Chongqing Machinery and GOLD ROAD
Assuming the 90 days horizon Chongqing Machinery Electric is expected to generate 1.01 times more return on investment than GOLD ROAD. However, Chongqing Machinery is 1.01 times more volatile than GOLD ROAD RES. It trades about 0.11 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.1 per unit of risk. If you would invest 7.65 in Chongqing Machinery Electric on October 6, 2024 and sell it today you would earn a total of 0.85 from holding Chongqing Machinery Electric or generate 11.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 97.5% |
Values | Daily Returns |
Chongqing Machinery Electric vs. GOLD ROAD RES
Performance |
Timeline |
Chongqing Machinery |
GOLD ROAD RES |
Chongqing Machinery and GOLD ROAD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chongqing Machinery and GOLD ROAD
The main advantage of trading using opposite Chongqing Machinery and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.Chongqing Machinery vs. Shenandoah Telecommunications | Chongqing Machinery vs. Highlight Communications AG | Chongqing Machinery vs. Ribbon Communications | Chongqing Machinery vs. SBA Communications Corp |
GOLD ROAD vs. Sanyo Chemical Industries | GOLD ROAD vs. Silicon Motion Technology | GOLD ROAD vs. Mitsubishi Gas Chemical | GOLD ROAD vs. NISSAN CHEMICAL IND |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |