Correlation Between Emdoor Information and Chongqing Changan
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By analyzing existing cross correlation between Emdoor Information Co and Chongqing Changan Automobile, you can compare the effects of market volatilities on Emdoor Information 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 Emdoor Information with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emdoor Information and Chongqing Changan.
Diversification Opportunities for Emdoor Information and Chongqing Changan
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emdoor and Chongqing is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Emdoor Information Co and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Emdoor Information 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 Emdoor Information Co 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 Emdoor Information i.e., Emdoor Information and Chongqing Changan go up and down completely randomly.
Pair Corralation between Emdoor Information and Chongqing Changan
Assuming the 90 days trading horizon Emdoor Information Co is expected to generate 3.17 times more return on investment than Chongqing Changan. However, Emdoor Information is 3.17 times more volatile than Chongqing Changan Automobile. It trades about -0.01 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.15 per unit of risk. If you would invest 5,152 in Emdoor Information Co on October 30, 2024 and sell it today you would lose (287.00) from holding Emdoor Information Co or give up 5.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emdoor Information Co vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Emdoor Information |
| Chongqing Changan |
Emdoor Information and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emdoor Information and Chongqing Changan
The main advantage of trading using opposite Emdoor Information and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emdoor Information 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.The idea behind Emdoor Information Co and Chongqing Changan Automobile pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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