Correlation Between Chongqing Changan and China Marine
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By analyzing existing cross correlation between Chongqing Changan Automobile and China Marine Information, you can compare the effects of market volatilities on Chongqing Changan and China Marine 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 China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and China Marine.
Diversification Opportunities for Chongqing Changan and China Marine
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chongqing and China is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and China Marine Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Information 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 China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Information has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and China Marine go up and down completely randomly.
Pair Corralation between Chongqing Changan and China Marine
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to under-perform the China Marine. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Changan Automobile is 2.69 times less risky than China Marine. The stock trades about -0.31 of its potential returns per unit of risk. The China Marine Information is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 2,683 in China Marine Information on October 11, 2024 and sell it today you would lose (243.00) from holding China Marine Information or give up 9.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. China Marine Information
Performance |
| Timeline |
| Chongqing Changan |
| China Marine Information |
Chongqing Changan and China Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and China Marine
The main advantage of trading using opposite Chongqing Changan and China Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, China Marine 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 China Marine will offset losses from the drop in China Marine's long position.| Chongqing Changan vs. Elite Color Environmental | Chongqing Changan vs. Marssenger Kitchenware Co | Chongqing Changan vs. Penyao Environmental Protection | Chongqing Changan vs. Anhui Deli Household |
| China Marine vs. Zhongshan Public Utilities | China Marine vs. Chongqing Changan Automobile | China Marine vs. Digital China Information | China Marine vs. Guangzhou Ruoyuchen Information |
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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