Correlation Between Shanghai Metersbonwe and Chongqing Changan
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By analyzing existing cross correlation between Shanghai Metersbonwe FashionAccessories and Chongqing Changan Automobile, you can compare the effects of market volatilities on Shanghai Metersbonwe 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 Shanghai Metersbonwe with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Metersbonwe and Chongqing Changan.
Diversification Opportunities for Shanghai Metersbonwe and Chongqing Changan
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Chongqing is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Metersbonwe FashionAc and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Shanghai Metersbonwe 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 Shanghai Metersbonwe FashionAccessories 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 Shanghai Metersbonwe i.e., Shanghai Metersbonwe and Chongqing Changan go up and down completely randomly.
Pair Corralation between Shanghai Metersbonwe and Chongqing Changan
Assuming the 90 days trading horizon Shanghai Metersbonwe FashionAccessories is expected to generate 2.66 times more return on investment than Chongqing Changan. However, Shanghai Metersbonwe is 2.66 times more volatile than Chongqing Changan Automobile. It trades about 0.29 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.06 per unit of risk. If you would invest 187.00 in Shanghai Metersbonwe FashionAccessories on September 14, 2024 and sell it today you would earn a total of 71.00 from holding Shanghai Metersbonwe FashionAccessories or generate 37.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Metersbonwe FashionAc vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Shanghai Metersbonwe |
| Chongqing Changan |
Shanghai Metersbonwe and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Metersbonwe and Chongqing Changan
The main advantage of trading using opposite Shanghai Metersbonwe and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Metersbonwe 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.| Shanghai Metersbonwe vs. Industrial and Commercial | Shanghai Metersbonwe vs. Agricultural Bank of | Shanghai Metersbonwe vs. China Construction Bank | Shanghai Metersbonwe vs. Bank of China |
| Chongqing Changan vs. Linzhou Heavy Machinery | Chongqing Changan vs. Shaanxi Broadcast TV | Chongqing Changan vs. Hongrun Construction Group | Chongqing Changan vs. Shanghai Metersbonwe FashionAccessories |
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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