Correlation Between Yuan Longping and Chongqing Sokon
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By analyzing existing cross correlation between Yuan Longping High tech and Chongqing Sokon Ind, you can compare the effects of market volatilities on Yuan Longping and Chongqing Sokon 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 Yuan Longping with a short position of Chongqing Sokon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Longping and Chongqing Sokon.
Diversification Opportunities for Yuan Longping and Chongqing Sokon
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuan and Chongqing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Longping High tech and Chongqing Sokon Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Sokon Ind and Yuan Longping 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 Yuan Longping High tech are associated (or correlated) with Chongqing Sokon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Sokon Ind has no effect on the direction of Yuan Longping i.e., Yuan Longping and Chongqing Sokon go up and down completely randomly.
Pair Corralation between Yuan Longping and Chongqing Sokon
Assuming the 90 days trading horizon Yuan Longping High tech is expected to under-perform the Chongqing Sokon. But the stock apears to be less risky and, when comparing its historical volatility, Yuan Longping High tech is 1.9 times less risky than Chongqing Sokon. The stock trades about -0.05 of its potential returns per unit of risk. The Chongqing Sokon Ind is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,989 in Chongqing Sokon Ind on September 12, 2024 and sell it today you would earn a total of 4,383 from holding Chongqing Sokon Ind or generate 48.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan Longping High tech vs. Chongqing Sokon Ind
Performance |
| Timeline |
| Yuan Longping High |
| Chongqing Sokon Ind |
Yuan Longping and Chongqing Sokon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Longping and Chongqing Sokon
The main advantage of trading using opposite Yuan Longping and Chongqing Sokon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Longping position performs unexpectedly, Chongqing Sokon 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 Sokon will offset losses from the drop in Chongqing Sokon's long position.| Yuan Longping vs. China Petroleum Chemical | Yuan Longping vs. PetroChina Co Ltd | Yuan Longping vs. China State Construction | Yuan Longping vs. China Railway Group |
| Chongqing Sokon vs. Saurer Intelligent Technology | Chongqing Sokon vs. GRINM Semiconductor Materials | Chongqing Sokon vs. Niutech Environment Technology | Chongqing Sokon vs. Yuan Longping High tech |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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