Correlation Between China Securities and OMX Stockholm
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By analyzing existing cross correlation between China Securities 800 and OMX Stockholm Mid, you can compare the effects of market volatilities on China Securities and OMX Stockholm 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 Securities with a short position of OMX Stockholm. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and OMX Stockholm.
Diversification Opportunities for China Securities and OMX Stockholm
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and OMX is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and OMX Stockholm Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMX Stockholm Mid and China Securities 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 Securities 800 are associated (or correlated) with OMX Stockholm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMX Stockholm Mid has no effect on the direction of China Securities i.e., China Securities and OMX Stockholm go up and down completely randomly.
Pair Corralation between China Securities and OMX Stockholm
Assuming the 90 days trading horizon China Securities 800 is expected to generate 1.2 times more return on investment than OMX Stockholm. However, China Securities is 1.2 times more volatile than OMX Stockholm Mid. It trades about 0.02 of its potential returns per unit of risk. OMX Stockholm Mid is currently generating about 0.01 per unit of risk. If you would invest 389,356 in China Securities 800 on February 1, 2024 and sell it today you would earn a total of 1,445 from holding China Securities 800 or generate 0.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
China Securities 800 vs. OMX Stockholm Mid
Performance |
Timeline |
China Securities and OMX Stockholm Volatility Contrast
Predicted Return Density |
Returns |
China Securities 800
Pair trading matchups for China Securities
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Pair Trading with China Securities and OMX Stockholm
The main advantage of trading using opposite China Securities and OMX Stockholm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, OMX Stockholm 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 OMX Stockholm will offset losses from the drop in OMX Stockholm's long position.China Securities vs. Guilin Seamild Foods | China Securities vs. Pengxin International Mining | China Securities vs. Zhengzhou Coal Mining | China Securities vs. Ye Chiu Metal |
OMX Stockholm vs. Nilsson Special Vehicles | OMX Stockholm vs. High Coast Distillery | OMX Stockholm vs. Nexam Chemical Holding | OMX Stockholm vs. Spago Nanomedical AB |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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