Correlation Between Chinese Universe and Chengdu B

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

By analyzing existing cross correlation between Chinese Universe Publishing and Chengdu B ray Media, you can compare the effects of market volatilities on Chinese Universe and Chengdu B 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 Chinese Universe with a short position of Chengdu B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Universe and Chengdu B.

Diversification Opportunities for Chinese Universe and Chengdu B

-0.33

Correlation Coefficient

Chinese Universe  Chengdu B

Very good diversification

The 3 months correlation between Chinese and Chengdu is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Universe Publishing and Chengdu B ray Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu B ray and Chinese Universe 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 Chinese Universe Publishing are associated (or correlated) with Chengdu B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu B ray has no effect on the direction of Chinese Universe i.e., Chinese Universe and Chengdu B go up and down completely randomly.

Pair Corralation between Chinese Universe and Chengdu B

Assuming the 90 days trading horizon Chinese Universe Publishing is expected to generate 0.99 times more return on investment than Chengdu B. However, Chinese Universe Publishing is 1.01 times less risky than Chengdu B. It trades about 0.04 of its potential returns per unit of risk. Chengdu B ray Media is currently generating about 0.0 per unit of risk. If you would invest  941.00  in Chinese Universe Publishing on September 27, 2024 and sell it today you would earn a total of  356.00  from holding Chinese Universe Publishing or generate 37.83% return on investment over 90 days.

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

Chinese Universe Publishing  vs.  Chengdu B ray Media

Chinese Universe Pub

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chinese Universe Publishing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Chengdu B ray

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chengdu B ray Media are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chengdu B sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chinese Universe and Chengdu B

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

The idea behind Chinese Universe Publishing and Chengdu B ray Media 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.