Correlation Between Chongqing Changan and Changzhou Almaden
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By analyzing existing cross correlation between Chongqing Changan Automobile and Changzhou Almaden Co, you can compare the effects of market volatilities on Chongqing Changan and Changzhou Almaden 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 Changzhou Almaden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Changzhou Almaden.
Diversification Opportunities for Chongqing Changan and Changzhou Almaden
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Changzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Changzhou Almaden Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changzhou Almaden 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 Changzhou Almaden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changzhou Almaden has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Changzhou Almaden go up and down completely randomly.
Pair Corralation between Chongqing Changan and Changzhou Almaden
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to under-perform the Changzhou Almaden. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Changan Automobile is 1.21 times less risky than Changzhou Almaden. The stock trades about -0.18 of its potential returns per unit of risk. The Changzhou Almaden Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,857 in Changzhou Almaden Co on September 13, 2024 and sell it today you would lose (31.00) from holding Changzhou Almaden Co or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Changzhou Almaden Co
Performance |
| Timeline |
| Chongqing Changan |
| Changzhou Almaden |
Chongqing Changan and Changzhou Almaden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Changzhou Almaden
The main advantage of trading using opposite Chongqing Changan and Changzhou Almaden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Changzhou Almaden 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 Changzhou Almaden will offset losses from the drop in Changzhou Almaden's long position.| Chongqing Changan vs. Cambricon Technologies Corp | Chongqing Changan vs. Loongson Technology Corp | Chongqing Changan vs. Shenzhen Fortune Trend | Chongqing Changan vs. Chongqing Road Bridge |
| Changzhou Almaden vs. HaiXin Foods Co | Changzhou Almaden vs. Ping An Insurance | Changzhou Almaden vs. Marssenger Kitchenware Co | Changzhou Almaden vs. V V Food |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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