Correlation Between Chateau International and Chaintech Technology

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

By analyzing existing cross correlation between Chateau International Development and Chaintech Technology Corp, you can compare the effects of market volatilities on Chateau International and Chaintech Technology 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 Chateau International with a short position of Chaintech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chateau International and Chaintech Technology.

Diversification Opportunities for Chateau International and Chaintech Technology

0.54

Correlation Coefficient

Chateau International  Chaintech Technology

Very weak diversification

The 3 months correlation between Chateau and Chaintech is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chateau International Developm and Chaintech Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaintech Technology Corp and Chateau International 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 Chateau International Development are associated (or correlated) with Chaintech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaintech Technology Corp has no effect on the direction of Chateau International i.e., Chateau International and Chaintech Technology go up and down completely randomly.

Pair Corralation between Chateau International and Chaintech Technology

Assuming the 90 days trading horizon Chateau International Development is expected to under-perform the Chaintech Technology. But the stock apears to be less risky and, when comparing its historical volatility, Chateau International Development is 1.65 times less risky than Chaintech Technology. The stock trades about -0.18 of its potential returns per unit of risk. The Chaintech Technology Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  4,300  in Chaintech Technology Corp on September 2, 2024 and sell it today you would lose (510.00) from holding Chaintech Technology Corp or give up 11.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Chateau International Developm  vs.  Chaintech Technology Corp

Chateau International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chateau International Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Chaintech Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chaintech Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Chateau International and Chaintech Technology

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

The idea behind Chateau International Development and Chaintech Technology Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.