Correlation Between Amada and China Senior
Can any of the company-specific risk be diversified away by investing in both Amada and China Senior 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 Amada and China Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amada Co and China Senior Living, you can compare the effects of market volatilities on Amada and China Senior 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 Amada with a short position of China Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amada and China Senior.
Diversification Opportunities for Amada and China Senior
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amada and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amada Co and China Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Senior Living and Amada 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 Amada Co are associated (or correlated) with China Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Senior Living has no effect on the direction of Amada i.e., Amada and China Senior go up and down completely randomly.
Pair Corralation between Amada and China Senior
If you would invest 0.10 in China Senior Living on January 26, 2024 and sell it today you would earn a total of 0.00 from holding China Senior Living or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amada Co vs. China Senior Living
Performance |
| Timeline |
| Amada |
| China Senior Living |
Amada and China Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amada and China Senior
The main advantage of trading using opposite Amada and China Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amada position performs unexpectedly, China Senior 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 China Senior will offset losses from the drop in China Senior's long position.The idea behind Amada Co and China Senior Living 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.| China Senior vs. ProSiebenSat1 Media AG | China Senior vs. iHeartMedia | China Senior vs. ITV PLC ADR | China Senior vs. Walt Disney |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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