Correlation Between China Finance and Eqonex

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

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

Diversification Opportunities for China Finance and Eqonex

0.0

Correlation Coefficient

China Finance  Eqonex

Pay attention - limited upside

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

Pair Corralation between China Finance and Eqonex

If you would invest  195.00  in Eqonex on January 25, 2024 and sell it today you would lose (188.78) from holding Eqonex or give up 96.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

China Finance Online  vs.  Eqonex

China Finance Online

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Finance Online has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking indicators, China Finance is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Eqonex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eqonex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eqonex is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with China Finance and Eqonex

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

The idea behind China Finance Online and Eqonex 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.