Correlation Between Chongqing Changan and Hainan Haiqi
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By analyzing existing cross correlation between Chongqing Changan Automobile and Hainan Haiqi Transportation, you can compare the effects of market volatilities on Chongqing Changan and Hainan Haiqi 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 Haiqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Hainan Haiqi.
Diversification Opportunities for Chongqing Changan and Hainan Haiqi
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Hainan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Hainan Haiqi Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiqi Transpo 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 Haiqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiqi Transpo has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Hainan Haiqi go up and down completely randomly.
Pair Corralation between Chongqing Changan and Hainan Haiqi
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 0.95 times more return on investment than Hainan Haiqi. However, Chongqing Changan Automobile is 1.06 times less risky than Hainan Haiqi. It trades about 0.03 of its potential returns per unit of risk. Hainan Haiqi Transportation is currently generating about -0.01 per unit of risk. If you would invest 1,254 in Chongqing Changan Automobile on September 14, 2024 and sell it today you would earn a total of 208.00 from holding Chongqing Changan Automobile or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Hainan Haiqi Transportation
Performance |
| Timeline |
| Chongqing Changan |
| Hainan Haiqi Transpo |
Chongqing Changan and Hainan Haiqi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Hainan Haiqi
The main advantage of trading using opposite Chongqing Changan and Hainan Haiqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Hainan Haiqi 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 Haiqi will offset losses from the drop in Hainan Haiqi's long position.| Chongqing Changan vs. Linzhou Heavy Machinery | Chongqing Changan vs. Shaanxi Broadcast TV | Chongqing Changan vs. Hongrun Construction Group | Chongqing Changan vs. Shanghai Metersbonwe FashionAccessories |
| Hainan Haiqi vs. Ming Yang Smart | Hainan Haiqi vs. 159681 | Hainan Haiqi vs. 159005 | Hainan Haiqi vs. Loctek Ergonomic Technology |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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