Correlation Between Chongqing Changan and Zhongzhu Medical
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By analyzing existing cross correlation between Chongqing Changan Automobile and Zhongzhu Medical Holdings, you can compare the effects of market volatilities on Chongqing Changan and Zhongzhu Medical 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 Zhongzhu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Zhongzhu Medical.
Diversification Opportunities for Chongqing Changan and Zhongzhu Medical
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Zhongzhu is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Zhongzhu Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongzhu Medical Holdings 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 Zhongzhu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongzhu Medical Holdings has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Zhongzhu Medical go up and down completely randomly.
Pair Corralation between Chongqing Changan and Zhongzhu Medical
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 1.35 times more return on investment than Zhongzhu Medical. However, Chongqing Changan is 1.35 times more volatile than Zhongzhu Medical Holdings. It trades about 0.01 of its potential returns per unit of risk. Zhongzhu Medical Holdings is currently generating about -0.03 per unit of risk. If you would invest 1,340 in Chongqing Changan Automobile on October 16, 2024 and sell it today you would lose (57.00) from holding Chongqing Changan Automobile or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Zhongzhu Medical Holdings
Performance |
| Timeline |
| Chongqing Changan |
| Zhongzhu Medical Holdings |
Chongqing Changan and Zhongzhu Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Zhongzhu Medical
The main advantage of trading using opposite Chongqing Changan and Zhongzhu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Zhongzhu Medical 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 Zhongzhu Medical will offset losses from the drop in Zhongzhu Medical's long position.| Chongqing Changan vs. Wonders Information | Chongqing Changan vs. AVCON Information Tech | Chongqing Changan vs. Emdoor Information Co | Chongqing Changan vs. Sichuan Hebang Biotechnology |
| Zhongzhu Medical vs. Harbin Hatou Investment | Zhongzhu Medical vs. TianJin 712 Communication | Zhongzhu Medical vs. Chengdu Xingrong Investment | Zhongzhu Medical vs. Zhangjiagang Freetrade Science |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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