Correlation Between Chongqing Changan and Integrated Electronic
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By analyzing existing cross correlation between Chongqing Changan Automobile and Integrated Electronic Systems, you can compare the effects of market volatilities on Chongqing Changan and Integrated Electronic 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 Integrated Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Integrated Electronic.
Diversification Opportunities for Chongqing Changan and Integrated Electronic
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Integrated is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Integrated Electronic Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Electronic 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 Integrated Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Electronic has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Integrated Electronic go up and down completely randomly.
Pair Corralation between Chongqing Changan and Integrated Electronic
Assuming the 90 days trading horizon Chongqing Changan is expected to generate 1.35 times less return on investment than Integrated Electronic. But when comparing it to its historical volatility, Chongqing Changan Automobile is 1.15 times less risky than Integrated Electronic. It trades about 0.02 of its potential returns per unit of risk. Integrated Electronic Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 686.00 in Integrated Electronic Systems on September 4, 2024 and sell it today you would earn a total of 101.00 from holding Integrated Electronic Systems or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Integrated Electronic Systems
Performance |
| Timeline |
| Chongqing Changan |
| Integrated Electronic |
Chongqing Changan and Integrated Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Integrated Electronic
The main advantage of trading using opposite Chongqing Changan and Integrated Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Integrated Electronic 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 Integrated Electronic will offset losses from the drop in Integrated Electronic's long position.| Chongqing Changan vs. Industrial and Commercial | Chongqing Changan vs. China Construction Bank | Chongqing Changan vs. Agricultural Bank of | Chongqing Changan vs. Bank of China |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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