Correlation Between Chongqing Changan and Beijing SuperMap
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By analyzing existing cross correlation between Chongqing Changan Automobile and Beijing SuperMap Software, you can compare the effects of market volatilities on Chongqing Changan and Beijing SuperMap 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 Beijing SuperMap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Beijing SuperMap.
Diversification Opportunities for Chongqing Changan and Beijing SuperMap
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Beijing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Beijing SuperMap Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing SuperMap 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 Beijing SuperMap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing SuperMap Software has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Beijing SuperMap go up and down completely randomly.
Pair Corralation between Chongqing Changan and Beijing SuperMap
Assuming the 90 days trading horizon Chongqing Changan is expected to generate 2.22 times less return on investment than Beijing SuperMap. But when comparing it to its historical volatility, Chongqing Changan Automobile is 1.35 times less risky than Beijing SuperMap. It trades about 0.21 of its potential returns per unit of risk. Beijing SuperMap Software is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,589 in Beijing SuperMap Software on November 28, 2024 and sell it today you would earn a total of 277.00 from holding Beijing SuperMap Software or generate 17.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.12% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Beijing SuperMap Software
Performance |
| Timeline |
| Chongqing Changan |
| Beijing SuperMap Software |
Chongqing Changan and Beijing SuperMap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Beijing SuperMap
The main advantage of trading using opposite Chongqing Changan and Beijing SuperMap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Beijing SuperMap 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 Beijing SuperMap will offset losses from the drop in Beijing SuperMap's long position.| Chongqing Changan vs. Guangdong Qunxing Toys | Chongqing Changan vs. Ningxia Younglight Chemicals | Chongqing Changan vs. Hubei Xingfa Chemicals | Chongqing Changan vs. Nanjing Vishee Medical |
| Beijing SuperMap vs. Qumei Furniture Group | Beijing SuperMap vs. Tibet Huayu Mining | Beijing SuperMap vs. Juneyao Airlines | Beijing SuperMap vs. Zijin Mining Group |
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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