Correlation Between Glodon Software and Chongqing Department
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By analyzing existing cross correlation between Glodon Software Co and Chongqing Department Store, you can compare the effects of market volatilities on Glodon Software and Chongqing Department 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 Glodon Software with a short position of Chongqing Department. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glodon Software and Chongqing Department.
Diversification Opportunities for Glodon Software and Chongqing Department
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Glodon and Chongqing is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Glodon Software Co and Chongqing Department Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Department and Glodon Software 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 Glodon Software Co are associated (or correlated) with Chongqing Department. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Department has no effect on the direction of Glodon Software i.e., Glodon Software and Chongqing Department go up and down completely randomly.
Pair Corralation between Glodon Software and Chongqing Department
Assuming the 90 days trading horizon Glodon Software is expected to generate 1.39 times less return on investment than Chongqing Department. But when comparing it to its historical volatility, Glodon Software Co is 1.01 times less risky than Chongqing Department. It trades about 0.09 of its potential returns per unit of risk. Chongqing Department Store is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,781 in Chongqing Department Store on December 4, 2024 and sell it today you would earn a total of 1,052 from holding Chongqing Department Store or generate 59.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glodon Software Co vs. Chongqing Department Store
Performance |
| Timeline |
| Glodon Software |
| Chongqing Department |
Glodon Software and Chongqing Department Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glodon Software and Chongqing Department
The main advantage of trading using opposite Glodon Software and Chongqing Department positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glodon Software position performs unexpectedly, Chongqing Department 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 Department will offset losses from the drop in Chongqing Department's long position.| Glodon Software vs. GuoChuang Software Co | Glodon Software vs. Beijing Watertek Information | Glodon Software vs. Shenzhen SDG Information | Glodon Software vs. AVCON Information Tech |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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