Correlation Between Canadian Utilities and Chuangs China
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Chuangs China 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 Canadian Utilities and Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and Chuangs China Investments, you can compare the effects of market volatilities on Canadian Utilities and Chuangs China 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 Canadian Utilities with a short position of Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Chuangs China.
Diversification Opportunities for Canadian Utilities and Chuangs China
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Chuangs is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments and Canadian Utilities 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 Canadian Utilities Limited are associated (or correlated) with Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Chuangs China go up and down completely randomly.
Pair Corralation between Canadian Utilities and Chuangs China
Assuming the 90 days horizon Canadian Utilities Limited is expected to generate 1.33 times more return on investment than Chuangs China. However, Canadian Utilities is 1.33 times more volatile than Chuangs China Investments. It trades about 0.07 of its potential returns per unit of risk. Chuangs China Investments is currently generating about 0.0 per unit of risk. If you would invest 2,297 in Canadian Utilities Limited on September 12, 2024 and sell it today you would earn a total of 121.00 from holding Canadian Utilities Limited or generate 5.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian Utilities Limited vs. Chuangs China Investments
Performance |
Timeline |
Canadian Utilities |
Chuangs China Investments |
Canadian Utilities and Chuangs China Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Utilities and Chuangs China
The main advantage of trading using opposite Canadian Utilities and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.Canadian Utilities vs. Dominion Energy | Canadian Utilities vs. Sempra | Canadian Utilities vs. Superior Plus Corp | Canadian Utilities vs. NMI Holdings |
Chuangs China vs. RCM TECHNOLOGIES | Chuangs China vs. Spirent Communications plc | Chuangs China vs. CITIC Telecom International | Chuangs China vs. Lion Biotechnologies |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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