Correlation Between Chongqing Changan and Penghua Shenzhen
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By analyzing existing cross correlation between Chongqing Changan Automobile and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Chongqing Changan and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Penghua Shenzhen.
Diversification Opportunities for Chongqing Changan and Penghua Shenzhen
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chongqing and Penghua is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Chongqing Changan and Penghua Shenzhen
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to under-perform the Penghua Shenzhen. In addition to that, Chongqing Changan is 2.07 times more volatile than Penghua Shenzhen Energy. It trades about -0.13 of its total potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about -0.08 per unit of volatility. If you would invest 633.00 in Penghua Shenzhen Energy on November 3, 2024 and sell it today you would lose (6.00) from holding Penghua Shenzhen Energy or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Penghua Shenzhen Energy
Performance |
| Timeline |
| Chongqing Changan |
| Penghua Shenzhen Energy |
Chongqing Changan and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Penghua Shenzhen
The main advantage of trading using opposite Chongqing Changan and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen's long position.| Chongqing Changan vs. Shandong Intco Medical | Chongqing Changan vs. Huizhou Speed Wireless | Chongqing Changan vs. Fiberhome Telecommunication Technologies | Chongqing Changan vs. Kontour Medical Technology |
| Penghua Shenzhen vs. China Publishing Media | Penghua Shenzhen vs. Biwin Storage Technology | Penghua Shenzhen vs. Heilongjiang Publishing Media | Penghua Shenzhen vs. Chengdu B ray Media |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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