Correlation Between CHKEL Old and China Gold

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

By analyzing existing cross correlation between CHKEL Old and China Gold International, you can compare the effects of market volatilities on CHKEL Old and China Gold 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 CHKEL Old with a short position of China Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHKEL Old and China Gold.

Diversification Opportunities for CHKEL Old and China Gold

0.0

Correlation Coefficient

CHKEL Old  China Gold

Pay attention - limited upside

The 3 months correlation between CHKEL and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHKEL Old and China Gold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Gold International and CHKEL Old 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 CHKEL Old are associated (or correlated) with China Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Gold International has no effect on the direction of CHKEL Old i.e., CHKEL Old and China Gold go up and down completely randomly.

Pair Corralation between CHKEL Old and China Gold

If you would invest  483.00  in China Gold International on December 2, 2024 and sell it today you would earn a total of  77.00  from holding China Gold International or generate 15.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CHKEL Old  vs.  China Gold International

CHKEL Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHKEL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, CHKEL Old is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

China Gold International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in China Gold International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, China Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHKEL Old and China Gold

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

The idea behind CHKEL Old and China Gold International 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.