Correlation Between Aba Chemicals and CICT Mobile
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By analyzing existing cross correlation between Aba Chemicals Corp and CICT Mobile Communication, you can compare the effects of market volatilities on Aba Chemicals and CICT Mobile 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 Aba Chemicals with a short position of CICT Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and CICT Mobile.
Diversification Opportunities for Aba Chemicals and CICT Mobile
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aba and CICT is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and CICT Mobile Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CICT Mobile Communication and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with CICT Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CICT Mobile Communication has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and CICT Mobile go up and down completely randomly.
Pair Corralation between Aba Chemicals and CICT Mobile
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to generate 1.62 times more return on investment than CICT Mobile. However, Aba Chemicals is 1.62 times more volatile than CICT Mobile Communication. It trades about 0.17 of its potential returns per unit of risk. CICT Mobile Communication is currently generating about 0.15 per unit of risk. If you would invest 522.00 in Aba Chemicals Corp on September 13, 2024 and sell it today you would earn a total of 298.00 from holding Aba Chemicals Corp or generate 57.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aba Chemicals Corp vs. CICT Mobile Communication
Performance |
Timeline |
Aba Chemicals Corp |
CICT Mobile Communication |
Aba Chemicals and CICT Mobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aba Chemicals and CICT Mobile
The main advantage of trading using opposite Aba Chemicals and CICT Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, CICT Mobile 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 CICT Mobile will offset losses from the drop in CICT Mobile's long position.Aba Chemicals vs. Changchun Faway Automobile | Aba Chemicals vs. Zhongyin Babi Food | Aba Chemicals vs. Jiangsu Financial Leasing | Aba Chemicals vs. Xiangyang Automobile Bearing |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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