Correlation Between Shaanxi Meineng and Chongqing Changan
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Chongqing Changan Automobile, you can compare the effects of market volatilities on Shaanxi Meineng and Chongqing Changan 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 Shaanxi Meineng with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Chongqing Changan.
Diversification Opportunities for Shaanxi Meineng and Chongqing Changan
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaanxi and Chongqing is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Shaanxi Meineng 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 Shaanxi Meineng Clean are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Chongqing Changan go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Chongqing Changan
Assuming the 90 days trading horizon Shaanxi Meineng Clean is expected to under-perform the Chongqing Changan. In addition to that, Shaanxi Meineng is 1.86 times more volatile than Chongqing Changan Automobile. It trades about -0.33 of its total potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.52 per unit of volatility. If you would invest 1,417 in Chongqing Changan Automobile on October 14, 2024 and sell it today you would lose (176.00) from holding Chongqing Changan Automobile or give up 12.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Shaanxi Meineng Clean |
| Chongqing Changan |
Shaanxi Meineng and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Chongqing Changan
The main advantage of trading using opposite Shaanxi Meineng and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Chongqing Changan 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 Changan will offset losses from the drop in Chongqing Changan's long position.| Shaanxi Meineng vs. Shandong Rike Chemical | Shaanxi Meineng vs. Touchstone International Medical | Shaanxi Meineng vs. Dymatic Chemicals | Shaanxi Meineng vs. Shenzhen Glory Medical |
| Chongqing Changan vs. Hua Xia Bank | Chongqing Changan vs. Shaanxi Meineng Clean | Chongqing Changan vs. GRG Banking Equipment | Chongqing Changan vs. Sihui Fuji Electronics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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