Correlation Between China Securities and Changchun Faway
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By analyzing existing cross correlation between China Securities 800 and Changchun Faway Automobile, you can compare the effects of market volatilities on China Securities and Changchun Faway 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 Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Changchun Faway.
Diversification Opportunities for China Securities and Changchun Faway
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Changchun is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto 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 Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of China Securities i.e., China Securities and Changchun Faway go up and down completely randomly.
Pair Corralation between China Securities and Changchun Faway
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Changchun Faway. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 1.79 times less risky than Changchun Faway. The index trades about -0.1 of its potential returns per unit of risk. The Changchun Faway Automobile is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 951.00 in Changchun Faway Automobile on August 28, 2024 and sell it today you would lose (11.00) from holding Changchun Faway Automobile or give up 1.16% of portfolio value 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 Faway Automobile
Performance |
| Timeline |
China Securities and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Changchun Faway Automobile
Pair trading matchups for Changchun Faway
Pair Trading with China Securities and Changchun Faway
The main advantage of trading using opposite China Securities and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Changchun Faway 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 Faway will offset losses from the drop in Changchun Faway'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 Faway vs. Miracll Chemicals Co | Changchun Faway vs. Guangzhou KingTeller Technology | Changchun Faway vs. Nantong Jiangshan Agrochemical | Changchun Faway vs. Shanghai Jinfeng Wine |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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