Correlation Between Chongqing Changan and Maoming Petro
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By analyzing existing cross correlation between Chongqing Changan Automobile and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Chongqing Changan and Maoming Petro 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 Chongqing Changan with a short position of Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Maoming Petro.
Diversification Opportunities for Chongqing Changan and Maoming Petro
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Maoming is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical and Chongqing Changan 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 Chongqing Changan Automobile are associated (or correlated) with Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Maoming Petro go up and down completely randomly.
Pair Corralation between Chongqing Changan and Maoming Petro
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to under-perform the Maoming Petro. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Changan Automobile is 1.4 times less risky than Maoming Petro. The stock trades about -0.28 of its potential returns per unit of risk. The Maoming Petro Chemical Shihua is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 384.00 in Maoming Petro Chemical Shihua on October 22, 2024 and sell it today you would lose (13.00) from holding Maoming Petro Chemical Shihua or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Chongqing Changan |
| Maoming Petro Chemical |
Chongqing Changan and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Maoming Petro
The main advantage of trading using opposite Chongqing Changan and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.| Chongqing Changan vs. Bank of Suzhou | Chongqing Changan vs. Panda Financial Holding | Chongqing Changan vs. Xiamen Bank Co | Chongqing Changan vs. Montage Technology Co |
| Maoming Petro vs. Cultural Investment Holdings | Maoming Petro vs. Suzhou Douson Drilling | Maoming Petro vs. Harvest Fund Management | Maoming Petro vs. Harbin Hatou Investment |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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