Correlation Between Changchun and Dymatic Chemicals
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By analyzing existing cross correlation between Changchun UP Optotech and Dymatic Chemicals, you can compare the effects of market volatilities on Changchun and Dymatic Chemicals 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 Dymatic Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Dymatic Chemicals.
Diversification Opportunities for Changchun and Dymatic Chemicals
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Dymatic is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Dymatic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dymatic Chemicals 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 Dymatic Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dymatic Chemicals has no effect on the direction of Changchun i.e., Changchun and Dymatic Chemicals go up and down completely randomly.
Pair Corralation between Changchun and Dymatic Chemicals
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.37 times more return on investment than Dymatic Chemicals. However, Changchun is 1.37 times more volatile than Dymatic Chemicals. It trades about 0.1 of its potential returns per unit of risk. Dymatic Chemicals is currently generating about 0.02 per unit of risk. If you would invest 2,762 in Changchun UP Optotech on September 3, 2024 and sell it today you would earn a total of 1,393 from holding Changchun UP Optotech or generate 50.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Dymatic Chemicals
Performance |
| Timeline |
| Changchun UP Optotech |
| Dymatic Chemicals |
Changchun and Dymatic Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Dymatic Chemicals
The main advantage of trading using opposite Changchun and Dymatic Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Dymatic Chemicals 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 Dymatic Chemicals will offset losses from the drop in Dymatic Chemicals' long position.| Changchun vs. Focus Media Information | Changchun vs. Jiangsu Yanghe Brewery | Changchun vs. Guangdong Brandmax Marketing | Changchun vs. YLZ Information Tech |
| Dymatic Chemicals vs. Jointo Energy Investment | Dymatic Chemicals vs. Tieling Newcity Investment | Dymatic Chemicals vs. Guangzhou Automobile Group | Dymatic Chemicals vs. Jiangsu Yueda Investment |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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