Correlation Between Chongqing Changan and Glodon Software
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By analyzing existing cross correlation between Chongqing Changan Automobile and Glodon Software Co, you can compare the effects of market volatilities on Chongqing Changan and Glodon Software 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 Glodon Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Glodon Software.
Diversification Opportunities for Chongqing Changan and Glodon Software
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chongqing and Glodon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Glodon Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glodon Software 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 Glodon Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glodon Software has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Glodon Software go up and down completely randomly.
Pair Corralation between Chongqing Changan and Glodon Software
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 0.58 times more return on investment than Glodon Software. However, Chongqing Changan Automobile is 1.73 times less risky than Glodon Software. It trades about -0.3 of its potential returns per unit of risk. Glodon Software Co is currently generating about -0.36 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. Glodon Software Co
Performance |
| Timeline |
| Chongqing Changan |
| Glodon Software |
Chongqing Changan and Glodon Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Glodon Software
The main advantage of trading using opposite Chongqing Changan and Glodon Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Glodon Software 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 Glodon Software will offset losses from the drop in Glodon Software'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 |
| Glodon Software vs. Anhui Deli Household | Glodon Software vs. Xiangyang Automobile Bearing | Glodon Software vs. Ningbo Fangzheng Automobile | Glodon Software vs. Chongqing Changan Automobile |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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