Correlation Between Chongqing Changan and Sinomach Automobile
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By analyzing existing cross correlation between Chongqing Changan Automobile and Sinomach Automobile Co, you can compare the effects of market volatilities on Chongqing Changan and Sinomach Automobile 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 Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Sinomach Automobile.
Diversification Opportunities for Chongqing Changan and Sinomach Automobile
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Sinomach is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile 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 Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Sinomach Automobile go up and down completely randomly.
Pair Corralation between Chongqing Changan and Sinomach Automobile
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 0.91 times more return on investment than Sinomach Automobile. However, Chongqing Changan Automobile is 1.1 times less risky than Sinomach Automobile. It trades about 0.02 of its potential returns per unit of risk. Sinomach Automobile Co is currently generating about 0.0 per unit of risk. If you would invest 1,272 in Chongqing Changan Automobile on September 4, 2024 and sell it today you would earn a total of 152.00 from holding Chongqing Changan Automobile or generate 11.95% 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. Sinomach Automobile Co
Performance |
| Timeline |
| Chongqing Changan |
| Sinomach Automobile |
Chongqing Changan and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Sinomach Automobile
The main advantage of trading using opposite Chongqing Changan and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Sinomach Automobile 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.| Chongqing Changan vs. Industrial and Commercial | Chongqing Changan vs. China Construction Bank | Chongqing Changan vs. Agricultural Bank of | Chongqing Changan vs. Bank of China |
| Sinomach Automobile vs. Guangdong Jingyi Metal | Sinomach Automobile vs. Gem Year Industrial Co | Sinomach Automobile vs. Ye Chiu Metal | Sinomach Automobile vs. Shenyang Huitian Thermal |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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