Correlation Between Chongqing Changan and Puyang Huicheng
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By analyzing existing cross correlation between Chongqing Changan Automobile and Puyang Huicheng Electronic, you can compare the effects of market volatilities on Chongqing Changan and Puyang Huicheng 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 Puyang Huicheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Puyang Huicheng.
Diversification Opportunities for Chongqing Changan and Puyang Huicheng
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Puyang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Puyang Huicheng Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puyang Huicheng Elec 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 Puyang Huicheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puyang Huicheng Elec has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Puyang Huicheng go up and down completely randomly.
Pair Corralation between Chongqing Changan and Puyang Huicheng
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 0.85 times more return on investment than Puyang Huicheng. However, Chongqing Changan Automobile is 1.18 times less risky than Puyang Huicheng. It trades about 0.02 of its potential returns per unit of risk. Puyang Huicheng Electronic is currently generating about -0.01 per unit of risk. If you would invest 1,352 in Chongqing Changan Automobile on August 28, 2024 and sell it today you would earn a total of 38.00 from holding Chongqing Changan Automobile or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Puyang Huicheng Electronic
Performance |
| Timeline |
| Chongqing Changan |
| Puyang Huicheng Elec |
Chongqing Changan and Puyang Huicheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Puyang Huicheng
The main advantage of trading using opposite Chongqing Changan and Puyang Huicheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Puyang Huicheng 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 Puyang Huicheng will offset losses from the drop in Puyang Huicheng's long position.| Chongqing Changan vs. Lutian Machinery Co | Chongqing Changan vs. China Longyuan Power | Chongqing Changan vs. Changshu Tongrun Auto | Chongqing Changan vs. PetroChina Co Ltd |
| Puyang Huicheng vs. Anji Foodstuff Co | Puyang Huicheng vs. Sichuan Teway Food | Puyang Huicheng vs. Shanghai Ziyan Foods | Puyang Huicheng vs. North Huajin Chemical |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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