Correlation Between Financial Street and Changchun
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By analyzing existing cross correlation between Financial Street Holdings and Changchun UP Optotech, you can compare the effects of market volatilities on Financial Street and Changchun 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 Financial Street with a short position of Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Street and Changchun.
Diversification Opportunities for Financial Street and Changchun
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Financial and Changchun is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Financial Street Holdings and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech and Financial Street 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 Financial Street Holdings are associated (or correlated) with Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Financial Street i.e., Financial Street and Changchun go up and down completely randomly.
Pair Corralation between Financial Street and Changchun
Assuming the 90 days trading horizon Financial Street Holdings is expected to under-perform the Changchun. But the stock apears to be less risky and, when comparing its historical volatility, Financial Street Holdings is 1.09 times less risky than Changchun. The stock trades about -0.58 of its potential returns per unit of risk. The Changchun UP Optotech is currently generating about -0.34 of returns per unit of risk over similar time horizon. If you would invest 4,333 in Changchun UP Optotech on October 12, 2024 and sell it today you would lose (698.00) from holding Changchun UP Optotech or give up 16.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Financial Street Holdings vs. Changchun UP Optotech
Performance |
Timeline |
Financial Street Holdings |
Changchun UP Optotech |
Financial Street and Changchun Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Financial Street and Changchun
The main advantage of trading using opposite Financial Street and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Street position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.Financial Street vs. Changchun UP Optotech | Financial Street vs. HanS Laser Tech | Financial Street vs. Holitech Technology Co | Financial Street vs. Jinhe Biotechnology Co |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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