Correlation Between Chongqing Changan and Jahen Household
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By analyzing existing cross correlation between Chongqing Changan Automobile and Jahen Household Products, you can compare the effects of market volatilities on Chongqing Changan and Jahen Household 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 Jahen Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Jahen Household.
Diversification Opportunities for Chongqing Changan and Jahen Household
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Jahen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Jahen Household Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahen Household Products 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 Jahen Household. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahen Household Products has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Jahen Household go up and down completely randomly.
Pair Corralation between Chongqing Changan and Jahen Household
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 0.86 times more return on investment than Jahen Household. However, Chongqing Changan Automobile is 1.17 times less risky than Jahen Household. It trades about 0.03 of its potential returns per unit of risk. Jahen Household Products is currently generating about 0.0 per unit of risk. If you would invest 1,254 in Chongqing Changan Automobile on September 14, 2024 and sell it today you would earn a total of 208.00 from holding Chongqing Changan Automobile or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Jahen Household Products
Performance |
| Timeline |
| Chongqing Changan |
| Jahen Household Products |
Chongqing Changan and Jahen Household Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Jahen Household
The main advantage of trading using opposite Chongqing Changan and Jahen Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Jahen Household 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 Jahen Household will offset losses from the drop in Jahen Household's long position.| Chongqing Changan vs. Linzhou Heavy Machinery | Chongqing Changan vs. Shaanxi Broadcast TV | Chongqing Changan vs. Hongrun Construction Group | Chongqing Changan vs. Shanghai Metersbonwe FashionAccessories |
| Jahen Household vs. China Sports Industry | Jahen Household vs. Hainan Haiqi Transportation | Jahen Household vs. Sino Platinum Metals Co | Jahen Household vs. Aluminum Corp of |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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