Correlation Between CHINA FORTUNE and CHINA EAST

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

By analyzing existing cross correlation between CHINA FORTUNE HLDGHD001 and CHINA EAST ED, you can compare the effects of market volatilities on CHINA FORTUNE and CHINA EAST 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 FORTUNE with a short position of CHINA EAST. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA FORTUNE and CHINA EAST.

Diversification Opportunities for CHINA FORTUNE and CHINA EAST

0.0

Correlation Coefficient

CHINA FORTUNE  CHINA EAST

Pay attention - limited upside

The 3 months correlation between CHINA and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA FORTUNE HLDGHD001 and CHINA EAST ED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EAST ED and CHINA FORTUNE 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 FORTUNE HLDGHD001 are associated (or correlated) with CHINA EAST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EAST ED has no effect on the direction of CHINA FORTUNE i.e., CHINA FORTUNE and CHINA EAST go up and down completely randomly.

Pair Corralation between CHINA FORTUNE and CHINA EAST

If you would invest  0.00  in CHINA FORTUNE HLDGHD001 on October 22, 2024 and sell it today you would earn a total of  0.00  from holding CHINA FORTUNE HLDGHD001 or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

CHINA FORTUNE HLDGHD001  vs.  CHINA EAST ED

CHINA FORTUNE HLDGHD001

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days CHINA FORTUNE HLDGHD001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CHINA FORTUNE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CHINA EAST ED

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CHINA FORTUNE and CHINA EAST

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

The idea behind CHINA FORTUNE HLDGHD001 and CHINA EAST ED 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.