Correlation Between Chengdu PUTIAN and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN and COFCO Joycome 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 Chengdu PUTIAN and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chengdu PUTIAN Telecommunications and COFCO Joycome Foods, you can compare the effects of market volatilities on Chengdu PUTIAN and COFCO Joycome 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 Chengdu PUTIAN with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and COFCO Joycome.
Diversification Opportunities for Chengdu PUTIAN and COFCO Joycome
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chengdu and COFCO is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Chengdu PUTIAN i.e., Chengdu PUTIAN and COFCO Joycome go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and COFCO Joycome
Assuming the 90 days trading horizon Chengdu PUTIAN Telecommunications is expected to generate 1.61 times more return on investment than COFCO Joycome. However, Chengdu PUTIAN is 1.61 times more volatile than COFCO Joycome Foods. It trades about 0.0 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.03 per unit of risk. If you would invest 7.80 in Chengdu PUTIAN Telecommunications on November 18, 2024 and sell it today you would lose (0.30) from holding Chengdu PUTIAN Telecommunications or give up 3.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. COFCO Joycome Foods
Performance |
Timeline |
Chengdu PUTIAN Telec |
COFCO Joycome Foods |
Chengdu PUTIAN and COFCO Joycome Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chengdu PUTIAN and COFCO Joycome
The main advantage of trading using opposite Chengdu PUTIAN and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.Chengdu PUTIAN vs. CAREER EDUCATION | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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