Correlation Between Digital China and Chongqing Brewery
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By analyzing existing cross correlation between Digital China Information and Chongqing Brewery Co, you can compare the effects of market volatilities on Digital China and Chongqing Brewery 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 Digital China with a short position of Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Chongqing Brewery.
Diversification Opportunities for Digital China and Chongqing Brewery
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Digital and Chongqing is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Information and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery and Digital China 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 Digital China Information are associated (or correlated) with Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Digital China i.e., Digital China and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Digital China and Chongqing Brewery
Assuming the 90 days trading horizon Digital China Information is expected to generate 2.11 times more return on investment than Chongqing Brewery. However, Digital China is 2.11 times more volatile than Chongqing Brewery Co. It trades about 0.02 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.01 per unit of risk. If you would invest 1,182 in Digital China Information on August 29, 2024 and sell it today you would lose (4.00) from holding Digital China Information or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital China Information vs. Chongqing Brewery Co
Performance |
| Timeline |
| Digital China Information |
| Chongqing Brewery |
Digital China and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital China and Chongqing Brewery
The main advantage of trading using opposite Digital China and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Digital China vs. Chongqing Brewery Co | Digital China vs. Vontron Technology Co | Digital China vs. Dongguan Aohai Technology | Digital China vs. Sinofibers Technology Co |
| Chongqing Brewery vs. PetroChina Co Ltd | Chongqing Brewery vs. China Mobile Limited | Chongqing Brewery vs. Ping An Insurance | Chongqing Brewery vs. China Petroleum Chemical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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