Correlation Between Chongqing Changan and Shanghai Rongtai
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By analyzing existing cross correlation between Chongqing Changan Automobile and Shanghai Rongtai Health, you can compare the effects of market volatilities on Chongqing Changan and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Shanghai Rongtai.
Diversification Opportunities for Chongqing Changan and Shanghai Rongtai
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Chongqing Changan and Shanghai Rongtai
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 0.87 times more return on investment than Shanghai Rongtai. However, Chongqing Changan Automobile is 1.15 times less risky than Shanghai Rongtai. It trades about 0.0 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.1 per unit of risk. If you would invest 1,442 in Chongqing Changan Automobile on September 3, 2024 and sell it today you would lose (61.00) from holding Chongqing Changan Automobile or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Shanghai Rongtai Health
Performance |
| Timeline |
| Chongqing Changan |
| Shanghai Rongtai Health |
Chongqing Changan and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Shanghai Rongtai
The main advantage of trading using opposite Chongqing Changan and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Chongqing Changan vs. Shandong Homey Aquatic | Chongqing Changan vs. Guangzhou Shangpin Home | Chongqing Changan vs. Hainan Mining Co | Chongqing Changan vs. Guangdong Jingyi Metal |
| Shanghai Rongtai vs. PetroChina Co Ltd | Shanghai Rongtai vs. China Mobile Limited | Shanghai Rongtai vs. Industrial and Commercial | Shanghai Rongtai vs. China Life Insurance |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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