Correlation Between Chongqing Changan and Ningbo Ligong
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By analyzing existing cross correlation between Chongqing Changan Automobile and Ningbo Ligong Online, you can compare the effects of market volatilities on Chongqing Changan and Ningbo Ligong 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 Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Ningbo Ligong.
Diversification Opportunities for Chongqing Changan and Ningbo Ligong
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chongqing and Ningbo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online 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 Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Ningbo Ligong go up and down completely randomly.
Pair Corralation between Chongqing Changan and Ningbo Ligong
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 1.05 times more return on investment than Ningbo Ligong. However, Chongqing Changan is 1.05 times more volatile than Ningbo Ligong Online. It trades about -0.3 of its potential returns per unit of risk. Ningbo Ligong Online is currently generating about -0.44 per unit of risk. If you would invest 1,406 in Chongqing Changan Automobile on October 11, 2024 and sell it today you would lose (139.00) from holding Chongqing Changan Automobile or give up 9.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Ningbo Ligong Online
Performance |
| Timeline |
| Chongqing Changan |
| Ningbo Ligong Online |
Chongqing Changan and Ningbo Ligong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Ningbo Ligong
The main advantage of trading using opposite Chongqing Changan and Ningbo Ligong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Ningbo Ligong 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 Ningbo Ligong will offset losses from the drop in Ningbo Ligong's long position.| Chongqing Changan vs. Elite Color Environmental | Chongqing Changan vs. Marssenger Kitchenware Co | Chongqing Changan vs. Penyao Environmental Protection | Chongqing Changan vs. Anhui Deli Household |
| Ningbo Ligong vs. Advanced Technology Materials | Ningbo Ligong vs. Jilin OLED Material | Ningbo Ligong vs. Tongyu Communication | Ningbo Ligong vs. Jiangxi Hengda Hi Tech |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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