Correlation Between Chongqing Changan and Cangzhou Mingzhu
Specify exactly 2 symbols:
By analyzing existing cross correlation between Chongqing Changan Automobile and Cangzhou Mingzhu Plastic, you can compare the effects of market volatilities on Chongqing Changan and Cangzhou Mingzhu 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 Cangzhou Mingzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Cangzhou Mingzhu.
Diversification Opportunities for Chongqing Changan and Cangzhou Mingzhu
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Cangzhou is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Cangzhou Mingzhu Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cangzhou Mingzhu Plastic 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 Cangzhou Mingzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cangzhou Mingzhu Plastic has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Cangzhou Mingzhu go up and down completely randomly.
Pair Corralation between Chongqing Changan and Cangzhou Mingzhu
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 2.02 times more return on investment than Cangzhou Mingzhu. However, Chongqing Changan is 2.02 times more volatile than Cangzhou Mingzhu Plastic. It trades about 0.2 of its potential returns per unit of risk. Cangzhou Mingzhu Plastic is currently generating about -0.05 per unit of risk. If you would invest 1,255 in Chongqing Changan Automobile on November 28, 2024 and sell it today you would earn a total of 84.00 from holding Chongqing Changan Automobile or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Cangzhou Mingzhu Plastic
Performance |
| Timeline |
| Chongqing Changan |
| Cangzhou Mingzhu Plastic |
Chongqing Changan and Cangzhou Mingzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Cangzhou Mingzhu
The main advantage of trading using opposite Chongqing Changan and Cangzhou Mingzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Cangzhou Mingzhu 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 Cangzhou Mingzhu will offset losses from the drop in Cangzhou Mingzhu's long position.| Chongqing Changan vs. Guangdong Qunxing Toys | Chongqing Changan vs. Ningxia Younglight Chemicals | Chongqing Changan vs. Hubei Xingfa Chemicals | Chongqing Changan vs. Nanjing Vishee Medical |
| Cangzhou Mingzhu vs. Zhejiang Kingland Pipeline | Cangzhou Mingzhu vs. Anker Innovations Technology | Cangzhou Mingzhu vs. Gem Year Industrial Co | Cangzhou Mingzhu vs. Xiangyang Automobile Bearing |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |