Correlation Between ChengDu Hi and Fujian Newland
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By analyzing existing cross correlation between ChengDu Hi Tech Development and Fujian Newland Computer, you can compare the effects of market volatilities on ChengDu Hi and Fujian Newland 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 ChengDu Hi with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChengDu Hi and Fujian Newland.
Diversification Opportunities for ChengDu Hi and Fujian Newland
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ChengDu and Fujian is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ChengDu Hi Tech Development and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and ChengDu Hi 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 ChengDu Hi Tech Development are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of ChengDu Hi i.e., ChengDu Hi and Fujian Newland go up and down completely randomly.
Pair Corralation between ChengDu Hi and Fujian Newland
Assuming the 90 days trading horizon ChengDu Hi is expected to generate 1.07 times less return on investment than Fujian Newland. In addition to that, ChengDu Hi is 1.3 times more volatile than Fujian Newland Computer. It trades about 0.06 of its total potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.09 per unit of volatility. If you would invest 1,497 in Fujian Newland Computer on August 29, 2024 and sell it today you would earn a total of 476.00 from holding Fujian Newland Computer or generate 31.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChengDu Hi Tech Development vs. Fujian Newland Computer
Performance |
| Timeline |
| ChengDu Hi Tech |
| Fujian Newland Computer |
ChengDu Hi and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChengDu Hi and Fujian Newland
The main advantage of trading using opposite ChengDu Hi and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChengDu Hi position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| ChengDu Hi vs. Changchun Faway Automobile | ChengDu Hi vs. Chongqing Changan Automobile | ChengDu Hi vs. Anhui Jianghuai Automobile | ChengDu Hi vs. Dongfeng Automobile Co |
| Fujian Newland vs. China State Construction | Fujian Newland vs. Huafa Industrial Co | Fujian Newland vs. China International Capital | Fujian Newland vs. Kweichow Moutai 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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