Correlation Between Shenyang Huitian and Chongqing Changan
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By analyzing existing cross correlation between Shenyang Huitian Thermal and Chongqing Changan Automobile, you can compare the effects of market volatilities on Shenyang Huitian 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 Shenyang Huitian with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Huitian and Chongqing Changan.
Diversification Opportunities for Shenyang Huitian and Chongqing Changan
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Chongqing is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Huitian Thermal and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Shenyang Huitian 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 Shenyang Huitian Thermal 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 Shenyang Huitian i.e., Shenyang Huitian and Chongqing Changan go up and down completely randomly.
Pair Corralation between Shenyang Huitian and Chongqing Changan
Assuming the 90 days trading horizon Shenyang Huitian Thermal is expected to under-perform the Chongqing Changan. In addition to that, Shenyang Huitian is 1.18 times more volatile than Chongqing Changan Automobile. It trades about -0.02 of its total potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.04 per unit of volatility. If you would invest 1,340 in Chongqing Changan Automobile on August 30, 2024 and sell it today you would earn a total of 22.00 from holding Chongqing Changan Automobile or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Huitian Thermal vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Shenyang Huitian Thermal |
| Chongqing Changan |
Shenyang Huitian and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Huitian and Chongqing Changan
The main advantage of trading using opposite Shenyang Huitian and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Huitian 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.| Shenyang Huitian vs. Ming Yang Smart | Shenyang Huitian vs. 159005 | Shenyang Huitian vs. Loctek Ergonomic Technology | Shenyang Huitian vs. 516220 |
| Chongqing Changan vs. Eastern Air Logistics | Chongqing Changan vs. Tongling Nonferrous Metals | Chongqing Changan vs. Hefei Metalforming Mach | Chongqing Changan vs. Ningbo Tech Bank 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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