Correlation Between OMX Copenhagen and China Securities
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By analyzing existing cross correlation between OMX Copenhagen All and China Securities 800, you can compare the effects of market volatilities on OMX Copenhagen and China Securities 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 OMX Copenhagen with a short position of China Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Copenhagen and China Securities.
Diversification Opportunities for OMX Copenhagen and China Securities
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OMX and China is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding OMX Copenhagen All and China Securities 800 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Securities 800 and OMX Copenhagen 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 OMX Copenhagen All are associated (or correlated) with China Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Securities 800 has no effect on the direction of OMX Copenhagen i.e., OMX Copenhagen and China Securities go up and down completely randomly.
Pair Corralation between OMX Copenhagen and China Securities
Assuming the 90 days trading horizon OMX Copenhagen is expected to generate 2.64 times less return on investment than China Securities. In addition to that, OMX Copenhagen is 1.32 times more volatile than China Securities 800. It trades about 0.01 of its total potential returns per unit of risk. China Securities 800 is currently generating about 0.05 per unit of volatility. If you would invest 384,726 in China Securities 800 on February 2, 2024 and sell it today you would earn a total of 6,075 from holding China Securities 800 or generate 1.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 97.56% |
Values | Daily Returns |
OMX Copenhagen All vs. China Securities 800
Performance |
Timeline |
OMX Copenhagen and China Securities Volatility Contrast
Predicted Return Density |
Returns |
OMX Copenhagen All
Pair trading matchups for OMX Copenhagen
China Securities 800
Pair trading matchups for China Securities
Pair Trading with OMX Copenhagen and China Securities
The main advantage of trading using opposite OMX Copenhagen and China Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Copenhagen position performs unexpectedly, China Securities 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 Securities will offset losses from the drop in China Securities' long position.OMX Copenhagen vs. Nordea Bank Abp | OMX Copenhagen vs. Groenlandsbanken AS | OMX Copenhagen vs. Carnegie Wealth Management | OMX Copenhagen vs. Nordinvestments AS |
China Securities vs. Guilin Seamild Foods | China Securities vs. Pengxin International Mining | China Securities vs. Zhengzhou Coal Mining | China Securities vs. Ye Chiu Metal |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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