Correlation Between Chia and China Sanjiang

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

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

Diversification Opportunities for Chia and China Sanjiang

0.19

Correlation Coefficient

Chia  China Sanjiang

Average diversification

The 3 months correlation between Chia and China is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Chia and China Sanjiang Fine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Sanjiang Fine and Chia 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 Chia are associated (or correlated) with China Sanjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Sanjiang Fine has no effect on the direction of Chia i.e., Chia and China Sanjiang go up and down completely randomly.

Pair Corralation between Chia and China Sanjiang

Assuming the 90 days trading horizon Chia is expected to under-perform the China Sanjiang. In addition to that, Chia is 1.68 times more volatile than China Sanjiang Fine. It trades about -0.09 of its total potential returns per unit of risk. China Sanjiang Fine is currently generating about 0.01 per unit of volatility. If you would invest  19.00  in China Sanjiang Fine on October 10, 2024 and sell it today you would earn a total of  0.00  from holding China Sanjiang Fine or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

Chia  vs.  China Sanjiang Fine

Chia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

China Sanjiang Fine

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in China Sanjiang Fine are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, China Sanjiang is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chia and China Sanjiang

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

The idea behind Chia and China Sanjiang Fine 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.