Correlation Between Changchun High and Caihong Display
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By analyzing existing cross correlation between Changchun High New and Caihong Display Devices, you can compare the effects of market volatilities on Changchun High and Caihong Display 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 Changchun High with a short position of Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun High and Caihong Display.
Diversification Opportunities for Changchun High and Caihong Display
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Changchun and Caihong is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Changchun High New and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices and Changchun High 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 Changchun High New are associated (or correlated) with Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Changchun High i.e., Changchun High and Caihong Display go up and down completely randomly.
Pair Corralation between Changchun High and Caihong Display
Assuming the 90 days trading horizon Changchun High New is expected to under-perform the Caihong Display. But the stock apears to be less risky and, when comparing its historical volatility, Changchun High New is 3.41 times less risky than Caihong Display. The stock trades about -0.12 of its potential returns per unit of risk. The Caihong Display Devices is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 785.00 in Caihong Display Devices on November 4, 2024 and sell it today you would earn a total of 63.00 from holding Caihong Display Devices or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun High New vs. Caihong Display Devices
Performance |
| Timeline |
| Changchun High New |
| Caihong Display Devices |
Changchun High and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun High and Caihong Display
The main advantage of trading using opposite Changchun High and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun High position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display's long position.| Changchun High vs. Shuhua Sports Co | Changchun High vs. Zhejiang Construction Investment | Changchun High vs. Fujian Longzhou Transportation | Changchun High vs. Sportsoul Co Ltd |
| Caihong Display vs. Ningbo Ligong Online | Caihong Display vs. Shenzhen Bioeasy Biotechnology | Caihong Display vs. Hytera Communications Corp | Caihong Display vs. Shanghai Rightongene Biotechnology |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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