Correlation Between China Securities and Changchun
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By analyzing existing cross correlation between China Securities 800 and Changchun UP Optotech, you can compare the effects of market volatilities on China Securities and Changchun 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Changchun.
Diversification Opportunities for China Securities and Changchun
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Changchun is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of China Securities i.e., China Securities and Changchun go up and down completely randomly.
Pair Corralation between China Securities and Changchun
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Changchun. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 3.66 times less risky than Changchun. The index trades about -0.11 of its potential returns per unit of risk. The Changchun UP Optotech is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,760 in Changchun UP Optotech on August 29, 2024 and sell it today you would earn a total of 304.00 from holding Changchun UP Optotech or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Securities 800 vs. Changchun UP Optotech
Performance |
| Timeline |
China Securities and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Changchun UP Optotech
Pair trading matchups for Changchun
Pair Trading with China Securities and Changchun
The main advantage of trading using opposite China Securities and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Changchun 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 will offset losses from the drop in Changchun's long position.| China Securities vs. Shandong Ruifeng Chemical | China Securities vs. Zhongtong Guomai Communication | China Securities vs. Gome Telecom Equipment | China Securities vs. Dymatic Chemicals |
| Changchun vs. CGN Nuclear Technology | Changchun vs. Penyao Environmental Protection | Changchun vs. GreenTech Environmental Co | Changchun vs. Kangping Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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