Correlation Between Chongqing Changan and China Citic
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By analyzing existing cross correlation between Chongqing Changan Automobile and China Citic Bank, you can compare the effects of market volatilities on Chongqing Changan and China Citic 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 Citic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and China Citic.
Diversification Opportunities for Chongqing Changan and China Citic
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chongqing and China is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and China Citic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Citic Bank 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 Citic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Citic Bank has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and China Citic go up and down completely randomly.
Pair Corralation between Chongqing Changan and China Citic
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 1.13 times more return on investment than China Citic. However, Chongqing Changan is 1.13 times more volatile than China Citic Bank. It trades about -0.05 of its potential returns per unit of risk. China Citic Bank is currently generating about -0.11 per unit of risk. If you would invest 1,271 in Chongqing Changan Automobile on November 6, 2024 and sell it today you would lose (16.00) from holding Chongqing Changan Automobile or give up 1.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. China Citic Bank
Performance |
| Timeline |
| Chongqing Changan |
| China Citic Bank |
Chongqing Changan and China Citic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and China Citic
The main advantage of trading using opposite Chongqing Changan and China Citic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, China Citic 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 Citic will offset losses from the drop in China Citic's long position.| Chongqing Changan vs. Xiandai Investment Co | Chongqing Changan vs. Zoje Resources Investment | Chongqing Changan vs. Harbin Hatou Investment | Chongqing Changan vs. Newcapec Electronics Co |
| China Citic vs. HeBei Jinniu Chemical | China Citic vs. Hengli Petrochemical Co | China Citic vs. Guizhou Chanhen Chemical | China Citic vs. Hangzhou Zhongya Machinery |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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