Correlation Between China Securities and Changchun High
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By analyzing existing cross correlation between China Securities 800 and Changchun High New, you can compare the effects of market volatilities on China Securities and Changchun High 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 China Securities with a short position of Changchun High. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Changchun High.
Diversification Opportunities for China Securities and Changchun High
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Changchun is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Changchun High New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun High New and China Securities 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 China Securities 800 are associated (or correlated) with Changchun High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun High New has no effect on the direction of China Securities i.e., China Securities and Changchun High go up and down completely randomly.
Pair Corralation between China Securities and Changchun High
Assuming the 90 days trading horizon China Securities is expected to generate 6.25 times less return on investment than Changchun High. But when comparing it to its historical volatility, China Securities 800 is 2.2 times less risky than Changchun High. It trades about 0.05 of its potential returns per unit of risk. Changchun High New is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 10,452 in Changchun High New on August 24, 2024 and sell it today you would earn a total of 849.00 from holding Changchun High New or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Changchun High New
Performance |
| Timeline |
China Securities and Changchun High Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Changchun High New
Pair trading matchups for Changchun High
Pair Trading with China Securities and Changchun High
The main advantage of trading using opposite China Securities and Changchun High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Changchun High 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 Changchun High will offset losses from the drop in Changchun High's long position.| China Securities vs. Zhejiang Yayi Metal | China Securities vs. Huatian Hotel Group | China Securities vs. Semiconductor Manufacturing Electronics | China Securities vs. Dalian Thermal Power |
| Changchun High vs. Changjiang Publishing Media | Changchun High vs. Shanghai Yanpu Metal | Changchun High vs. Pengxin International Mining | Changchun High vs. Chinese Universe Publishing |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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