Correlation Between Shenzhen Glory and Chongqing Changan
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By analyzing existing cross correlation between Shenzhen Glory Medical and Chongqing Changan Automobile, you can compare the effects of market volatilities on Shenzhen Glory 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 Shenzhen Glory with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and Chongqing Changan.
Diversification Opportunities for Shenzhen Glory and Chongqing Changan
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Chongqing is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Shenzhen Glory 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 Shenzhen Glory Medical 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 Shenzhen Glory i.e., Shenzhen Glory and Chongqing Changan go up and down completely randomly.
Pair Corralation between Shenzhen Glory and Chongqing Changan
Assuming the 90 days trading horizon Shenzhen Glory Medical is expected to under-perform the Chongqing Changan. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Glory Medical is 1.05 times less risky than Chongqing Changan. The stock trades about -0.02 of its potential returns per unit of risk. The Chongqing Changan Automobile is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,340 in Chongqing Changan Automobile on October 16, 2024 and sell it today you would lose (57.00) from holding Chongqing Changan Automobile or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Glory Medical vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Shenzhen Glory Medical |
| Chongqing Changan |
Shenzhen Glory and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Glory and Chongqing Changan
The main advantage of trading using opposite Shenzhen Glory and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory 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.| Shenzhen Glory vs. Anhui Gujing Distillery | Shenzhen Glory vs. Western Metal Materials | Shenzhen Glory vs. Shenyang Huitian Thermal | Shenzhen Glory vs. Eastern Air Logistics |
| Chongqing Changan vs. Wonders Information | Chongqing Changan vs. AVCON Information Tech | Chongqing Changan vs. Emdoor Information Co | Chongqing Changan vs. Sichuan Hebang Biotechnology |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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