Correlation Between Chuangs China and BANK HANDLOWY

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

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

Diversification Opportunities for Chuangs China and BANK HANDLOWY

0.0

Correlation Coefficient

Chuangs China  BANK HANDLOWY

Pay attention - limited upside

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

Pair Corralation between Chuangs China and BANK HANDLOWY

If you would invest  2,090  in BANK HANDLOWY on December 21, 2024 and sell it today you would earn a total of  635.00  from holding BANK HANDLOWY or generate 30.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Chuangs China Investments  vs.  BANK HANDLOWY

Chuangs China Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chuangs China Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Chuangs China is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

BANK HANDLOWY

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in BANK HANDLOWY are ranked lower than 38 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BANK HANDLOWY unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chuangs China and BANK HANDLOWY

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

The idea behind Chuangs China Investments and BANK HANDLOWY 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.