Correlation Between Chongqing Changan and Jinhui Liquor
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By analyzing existing cross correlation between Chongqing Changan Automobile and Jinhui Liquor Co, you can compare the effects of market volatilities on Chongqing Changan and Jinhui Liquor 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 Jinhui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Jinhui Liquor.
Diversification Opportunities for Chongqing Changan and Jinhui Liquor
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Jinhui is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Jinhui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Liquor 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 Jinhui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Liquor has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Jinhui Liquor go up and down completely randomly.
Pair Corralation between Chongqing Changan and Jinhui Liquor
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 1.2 times more return on investment than Jinhui Liquor. However, Chongqing Changan is 1.2 times more volatile than Jinhui Liquor Co. It trades about 0.02 of its potential returns per unit of risk. Jinhui Liquor Co is currently generating about -0.01 per unit of risk. If you would invest 1,272 in Chongqing Changan Automobile on September 4, 2024 and sell it today you would earn a total of 152.00 from holding Chongqing Changan Automobile or generate 11.95% 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. Jinhui Liquor Co
Performance |
| Timeline |
| Chongqing Changan |
| Jinhui Liquor |
Chongqing Changan and Jinhui Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Jinhui Liquor
The main advantage of trading using opposite Chongqing Changan and Jinhui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Jinhui Liquor 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 Jinhui Liquor will offset losses from the drop in Jinhui Liquor's long position.| Chongqing Changan vs. Industrial and Commercial | Chongqing Changan vs. China Construction Bank | Chongqing Changan vs. Agricultural Bank of | Chongqing Changan vs. Bank of China |
| Jinhui Liquor vs. Industrial and Commercial | Jinhui Liquor vs. Agricultural Bank of | Jinhui Liquor vs. China Construction Bank | Jinhui Liquor vs. Bank of China |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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