Correlation Between Chongqing Changan and China Resources
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By analyzing existing cross correlation between Chongqing Changan Automobile and China Resources Boya, you can compare the effects of market volatilities on Chongqing Changan and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and China Resources.
Diversification Opportunities for Chongqing Changan and China Resources
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chongqing and China is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and China Resources Boya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Boya 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Boya has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and China Resources go up and down completely randomly.
Pair Corralation between Chongqing Changan and China Resources
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 1.13 times more return on investment than China Resources. However, Chongqing Changan is 1.13 times more volatile than China Resources Boya. It trades about -0.09 of its potential returns per unit of risk. China Resources Boya is currently generating about -0.17 per unit of risk. If you would invest 1,520 in Chongqing Changan Automobile on October 7, 2024 and sell it today you would lose (245.00) from holding Chongqing Changan Automobile or give up 16.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. China Resources Boya
Performance |
| Timeline |
| Chongqing Changan |
| China Resources Boya |
Chongqing Changan and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and China Resources
The main advantage of trading using opposite Chongqing Changan and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Chongqing Changan vs. Agricultural Bank of | Chongqing Changan vs. Postal Savings Bank | Chongqing Changan vs. Gansu Jiu Steel | Chongqing Changan vs. Shandong Mining Machinery |
| China Resources vs. Konfoong Materials International | China Resources vs. Xinke Material | China Resources vs. Kangxin New Materials | China Resources vs. HaiXin Foods Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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