Correlation Between Hunan Investment and Changchun
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By analyzing existing cross correlation between Hunan Investment Group and Changchun UP Optotech, you can compare the effects of market volatilities on Hunan Investment 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 Hunan Investment with a short position of Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and Changchun.
Diversification Opportunities for Hunan Investment and Changchun
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Changchun is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group 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 Hunan Investment 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 Hunan Investment Group 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 Hunan Investment i.e., Hunan Investment and Changchun go up and down completely randomly.
Pair Corralation between Hunan Investment and Changchun
Assuming the 90 days trading horizon Hunan Investment is expected to generate 2.25 times less return on investment than Changchun. But when comparing it to its historical volatility, Hunan Investment Group is 1.32 times less risky than Changchun. It trades about 0.09 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,484 in Changchun UP Optotech on September 5, 2024 and sell it today you would earn a total of 957.00 from holding Changchun UP Optotech or generate 27.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Investment Group vs. Changchun UP Optotech
Performance |
| Timeline |
| Hunan Investment |
| Changchun UP Optotech |
Hunan Investment and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and Changchun
The main advantage of trading using opposite Hunan Investment and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment 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.| Hunan Investment vs. Cambricon Technologies Corp | Hunan Investment vs. Loongson Technology Corp | Hunan Investment vs. Shenzhen Fortune Trend | Hunan Investment vs. Chongqing Road Bridge |
| Changchun vs. Kweichow Moutai Co | Changchun vs. NAURA Technology Group | Changchun vs. APT Medical | Changchun vs. BYD Co Ltd |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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