Correlation Between Changchun and Tieling Newcity
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By analyzing existing cross correlation between Changchun UP Optotech and Tieling Newcity Investment, you can compare the effects of market volatilities on Changchun and Tieling Newcity 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 Changchun with a short position of Tieling Newcity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Tieling Newcity.
Diversification Opportunities for Changchun and Tieling Newcity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Tieling is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Tieling Newcity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tieling Newcity Inve and Changchun 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 Changchun UP Optotech are associated (or correlated) with Tieling Newcity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tieling Newcity Inve has no effect on the direction of Changchun i.e., Changchun and Tieling Newcity go up and down completely randomly.
Pair Corralation between Changchun and Tieling Newcity
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.98 times more return on investment than Tieling Newcity. However, Changchun is 1.98 times more volatile than Tieling Newcity Investment. It trades about 0.15 of its potential returns per unit of risk. Tieling Newcity Investment is currently generating about 0.25 per unit of risk. If you would invest 3,484 in Changchun UP Optotech on September 5, 2024 and sell it today you would earn a total of 957.00 from holding Changchun UP Optotech or generate 27.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Tieling Newcity Investment
Performance |
| Timeline |
| Changchun UP Optotech |
| Tieling Newcity Inve |
Changchun and Tieling Newcity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Tieling Newcity
The main advantage of trading using opposite Changchun and Tieling Newcity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Tieling Newcity 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 Tieling Newcity will offset losses from the drop in Tieling Newcity's long position.| Changchun vs. Kweichow Moutai Co | Changchun vs. NAURA Technology Group | Changchun vs. APT Medical | Changchun vs. BYD Co Ltd |
| Tieling Newcity vs. Cambricon Technologies Corp | Tieling Newcity vs. Loongson Technology Corp | Tieling Newcity vs. Shenzhen Fortune Trend | Tieling Newcity vs. Chongqing Road Bridge |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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