Correlation Between Chongqing Changan and Hainan Mining
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By analyzing existing cross correlation between Chongqing Changan Automobile and Hainan Mining Co, you can compare the effects of market volatilities on Chongqing Changan and Hainan Mining 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 Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Hainan Mining.
Diversification Opportunities for Chongqing Changan and Hainan Mining
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Hainan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining 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 Hainan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Mining has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Hainan Mining go up and down completely randomly.
Pair Corralation between Chongqing Changan and Hainan Mining
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 1.62 times more return on investment than Hainan Mining. However, Chongqing Changan is 1.62 times more volatile than Hainan Mining Co. It trades about 0.04 of its potential returns per unit of risk. Hainan Mining Co is currently generating about 0.06 per unit of risk. If you would invest 1,340 in Chongqing Changan Automobile on August 30, 2024 and sell it today you would earn a total of 22.00 from holding Chongqing Changan Automobile or generate 1.64% 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. Hainan Mining Co
Performance |
| Timeline |
| Chongqing Changan |
| Hainan Mining |
Chongqing Changan and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Hainan Mining
The main advantage of trading using opposite Chongqing Changan and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Hainan Mining 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 Hainan Mining will offset losses from the drop in Hainan Mining's long position.| Chongqing Changan vs. Eastern Air Logistics | Chongqing Changan vs. Tongling Nonferrous Metals | Chongqing Changan vs. Hefei Metalforming Mach | Chongqing Changan vs. Ningbo Tech Bank Co |
| Hainan Mining vs. Shanghai Xinhua Media | Hainan Mining vs. Guangzhou KingTeller Technology | Hainan Mining vs. Jiujiang Shanshui Technology | Hainan Mining vs. Sinofibers Technology Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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