Correlation Between China Securities and Changshu Automotive
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By analyzing existing cross correlation between China Securities 800 and Changshu Automotive Trim, you can compare the effects of market volatilities on China Securities and Changshu Automotive 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 Changshu Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Changshu Automotive.
Diversification Opportunities for China Securities and Changshu Automotive
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Changshu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Changshu Automotive Trim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Automotive Trim 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 Changshu Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Automotive Trim has no effect on the direction of China Securities i.e., China Securities and Changshu Automotive go up and down completely randomly.
Pair Corralation between China Securities and Changshu Automotive
Assuming the 90 days trading horizon China Securities is expected to generate 11.29 times less return on investment than Changshu Automotive. But when comparing it to its historical volatility, China Securities 800 is 1.8 times less risky than Changshu Automotive. It trades about 0.01 of its potential returns per unit of risk. Changshu Automotive Trim is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,379 in Changshu Automotive Trim on September 1, 2024 and sell it today you would earn a total of 69.00 from holding Changshu Automotive Trim or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Changshu Automotive Trim
Performance |
| Timeline |
China Securities and Changshu Automotive Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Changshu Automotive Trim
Pair trading matchups for Changshu Automotive
Pair Trading with China Securities and Changshu Automotive
The main advantage of trading using opposite China Securities and Changshu Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Changshu Automotive 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 Changshu Automotive will offset losses from the drop in Changshu Automotive's long position.| China Securities vs. Everjoy Health Group | China Securities vs. Fuzhou Rockchip Electronics | China Securities vs. Hangzhou Prevail Optoelectronic | China Securities vs. Aurora Optoelectronics 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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