Correlation Between Xiangyang Automobile and Chongqing Changan
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Chongqing Changan Automobile, you can compare the effects of market volatilities on Xiangyang Automobile and Chongqing Changan 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 Xiangyang Automobile with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Chongqing Changan.
Diversification Opportunities for Xiangyang Automobile and Chongqing Changan
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiangyang and Chongqing is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Xiangyang Automobile 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 Xiangyang Automobile Bearing are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Chongqing Changan go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Chongqing Changan
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 1.39 times more return on investment than Chongqing Changan. However, Xiangyang Automobile is 1.39 times more volatile than Chongqing Changan Automobile. It trades about 0.1 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.02 per unit of risk. If you would invest 421.00 in Xiangyang Automobile Bearing on August 31, 2024 and sell it today you would earn a total of 178.00 from holding Xiangyang Automobile Bearing or generate 42.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Xiangyang Automobile |
| Chongqing Changan |
Xiangyang Automobile and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Chongqing Changan
The main advantage of trading using opposite Xiangyang Automobile and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Chongqing Changan 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 Chongqing Changan will offset losses from the drop in Chongqing Changan's long position.| Xiangyang Automobile vs. China State Construction | Xiangyang Automobile vs. China Merchants Shekou | Xiangyang Automobile vs. Huafa Industrial Co | Xiangyang Automobile vs. China International Capital |
| Chongqing Changan vs. China State Construction | Chongqing Changan vs. China Merchants Shekou | Chongqing Changan vs. Huafa Industrial Co | Chongqing Changan vs. China International Capital |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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