Correlation Between China Changjiang and Solar Alliance

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

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

Diversification Opportunities for China Changjiang and Solar Alliance

0.0

Correlation Coefficient

China Changjiang  Solar Alliance

Pay attention - limited upside

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

Pair Corralation between China Changjiang and Solar Alliance

If you would invest  2.77  in China Changjiang Mining on September 3, 2024 and sell it today you would earn a total of  0.00  from holding China Changjiang Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

China Changjiang Mining  vs.  Solar Alliance Energy

China Changjiang Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Changjiang Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking indicators, China Changjiang is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Solar Alliance Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solar Alliance Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with China Changjiang and Solar Alliance

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

The idea behind China Changjiang Mining and Solar Alliance Energy 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..