Correlation Between Changchun and Chahua Modern
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By analyzing existing cross correlation between Changchun UP Optotech and Chahua Modern Housewares, you can compare the effects of market volatilities on Changchun and Chahua Modern 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 Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Chahua Modern.
Diversification Opportunities for Changchun and Chahua Modern
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Chahua is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares 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 Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Changchun i.e., Changchun and Chahua Modern go up and down completely randomly.
Pair Corralation between Changchun and Chahua Modern
Assuming the 90 days trading horizon Changchun is expected to generate 1.46 times less return on investment than Chahua Modern. In addition to that, Changchun is 1.01 times more volatile than Chahua Modern Housewares. It trades about 0.25 of its total potential returns per unit of risk. Chahua Modern Housewares is currently generating about 0.37 per unit of volatility. If you would invest 1,229 in Chahua Modern Housewares on August 25, 2024 and sell it today you would earn a total of 1,139 from holding Chahua Modern Housewares or generate 92.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Chahua Modern Housewares
Performance |
| Timeline |
| Changchun UP Optotech |
| Chahua Modern Housewares |
Changchun and Chahua Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Chahua Modern
The main advantage of trading using opposite Changchun and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern's long position.| Changchun vs. Huatian Hotel Group | Changchun vs. BTG Hotels Group | Changchun vs. Nexchip Semiconductor Corp | Changchun vs. Jinling Hotel Corp |
| Chahua Modern vs. Xiangyang Automobile Bearing | Chahua Modern vs. Ligao Foods CoLtd | Chahua Modern vs. Xiamen Jihong Package | Chahua Modern vs. Yankershop Food Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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