Correlation Between Chongqing Changan and Datang HuaYin
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By analyzing existing cross correlation between Chongqing Changan Automobile and Datang HuaYin Electric, you can compare the effects of market volatilities on Chongqing Changan and Datang HuaYin 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 Datang HuaYin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Datang HuaYin.
Diversification Opportunities for Chongqing Changan and Datang HuaYin
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Datang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Datang HuaYin Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang HuaYin Electric 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 Datang HuaYin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang HuaYin Electric has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Datang HuaYin go up and down completely randomly.
Pair Corralation between Chongqing Changan and Datang HuaYin
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 0.66 times more return on investment than Datang HuaYin. However, Chongqing Changan Automobile is 1.52 times less risky than Datang HuaYin. It trades about -0.32 of its potential returns per unit of risk. Datang HuaYin Electric is currently generating about -0.33 per unit of risk. If you would invest 1,407 in Chongqing Changan Automobile on October 9, 2024 and sell it today you would lose (136.00) from holding Chongqing Changan Automobile or give up 9.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Datang HuaYin Electric
Performance |
| Timeline |
| Chongqing Changan |
| Datang HuaYin Electric |
Chongqing Changan and Datang HuaYin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Datang HuaYin
The main advantage of trading using opposite Chongqing Changan and Datang HuaYin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Datang HuaYin 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 Datang HuaYin will offset losses from the drop in Datang HuaYin's long position.| Chongqing Changan vs. Everdisplay Optronics Shanghai | Chongqing Changan vs. King Strong New Material | Chongqing Changan vs. Beijing Shunxin Agriculture | Chongqing Changan vs. Sportsoul Co Ltd |
| Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. Bank of China | Datang HuaYin vs. PetroChina Co Ltd |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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