Correlation Between Geron and Chongqing Changan
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By analyzing existing cross correlation between Geron Co and Chongqing Changan Automobile, you can compare the effects of market volatilities on Geron 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 Geron with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geron and Chongqing Changan.
Diversification Opportunities for Geron and Chongqing Changan
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geron and Chongqing is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Geron Co and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Geron 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 Geron Co 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 Geron i.e., Geron and Chongqing Changan go up and down completely randomly.
Pair Corralation between Geron and Chongqing Changan
Assuming the 90 days trading horizon Geron Co is expected to generate 1.35 times more return on investment than Chongqing Changan. However, Geron is 1.35 times more volatile than Chongqing Changan Automobile. It trades about 0.08 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.04 per unit of risk. If you would invest 1,147 in Geron Co on November 2, 2024 and sell it today you would earn a total of 287.00 from holding Geron Co or generate 25.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geron Co vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Geron |
| Chongqing Changan |
Geron and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geron and Chongqing Changan
The main advantage of trading using opposite Geron and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geron 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.| Geron vs. Gansu Huangtai Wine marketing | Geron vs. Penyao Environmental Protection | Geron vs. Zhejiang Kingland Pipeline | Geron vs. Hangzhou Arcvideo Technology |
| Chongqing Changan vs. China Longyuan Power | Chongqing Changan vs. PetroChina Co Ltd | Chongqing Changan vs. Guangxi Guiguan Electric | Chongqing Changan vs. Yantai North Andre |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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