Correlation Between China Changjiang and VivoPower International

Can any of the company-specific risk be diversified away by investing in both China Changjiang and VivoPower International 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 VivoPower International 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 VivoPower International PLC, you can compare the effects of market volatilities on China Changjiang and VivoPower International 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 VivoPower International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Changjiang and VivoPower International.

Diversification Opportunities for China Changjiang and VivoPower International

0.0

Correlation Coefficient

China Changjiang  VivoPower International

Pay attention - limited upside

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

Pair Corralation between China Changjiang and VivoPower International

If you would invest  182.00  in VivoPower International PLC on September 3, 2024 and sell it today you would lose (64.00) from holding VivoPower International PLC or give up 35.16% of portfolio value over 90 days.

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

China Changjiang Mining  vs.  VivoPower International PLC

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.

VivoPower International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VivoPower International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, VivoPower International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with China Changjiang and VivoPower International

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

The idea behind China Changjiang Mining and VivoPower International PLC 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.