Correlation Between Chongqing Changan and Qingdao Choho
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By analyzing existing cross correlation between Chongqing Changan Automobile and Qingdao Choho Industrial, you can compare the effects of market volatilities on Chongqing Changan and Qingdao Choho 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 Qingdao Choho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Qingdao Choho.
Diversification Opportunities for Chongqing Changan and Qingdao Choho
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chongqing and Qingdao is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Qingdao Choho Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Choho Industrial 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 Qingdao Choho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Choho Industrial has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Qingdao Choho go up and down completely randomly.
Pair Corralation between Chongqing Changan and Qingdao Choho
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to under-perform the Qingdao Choho. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Changan Automobile is 1.13 times less risky than Qingdao Choho. The stock trades about -0.03 of its potential returns per unit of risk. The Qingdao Choho Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,529 in Qingdao Choho Industrial on October 24, 2024 and sell it today you would earn a total of 285.00 from holding Qingdao Choho Industrial or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Qingdao Choho Industrial
Performance |
| Timeline |
| Chongqing Changan |
| Qingdao Choho Industrial |
Chongqing Changan and Qingdao Choho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Qingdao Choho
The main advantage of trading using opposite Chongqing Changan and Qingdao Choho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Qingdao Choho 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 Qingdao Choho will offset losses from the drop in Qingdao Choho's long position.| Chongqing Changan vs. Qingdao Choho Industrial | Chongqing Changan vs. Soochow Suzhou Industrial | Chongqing Changan vs. Anhui Jinhe Industrial | Chongqing Changan vs. Pengxin International Mining |
| Qingdao Choho vs. Shenzhen MYS Environmental | Qingdao Choho vs. Harbin Hatou Investment | Qingdao Choho vs. Jointo Energy Investment | Qingdao Choho vs. Sinocat Environmental Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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