Correlation Between Guangzhou KDT and Chongqing Changan
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By analyzing existing cross correlation between Guangzhou KDT Machinery and Chongqing Changan Automobile, you can compare the effects of market volatilities on Guangzhou KDT 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 Guangzhou KDT with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KDT and Chongqing Changan.
Diversification Opportunities for Guangzhou KDT and Chongqing Changan
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Chongqing is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KDT Machinery and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Guangzhou KDT 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 Guangzhou KDT Machinery 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 Guangzhou KDT i.e., Guangzhou KDT and Chongqing Changan go up and down completely randomly.
Pair Corralation between Guangzhou KDT and Chongqing Changan
Assuming the 90 days trading horizon Guangzhou KDT Machinery is expected to generate 1.04 times more return on investment than Chongqing Changan. However, Guangzhou KDT is 1.04 times more volatile than Chongqing Changan Automobile. It trades about 0.0 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.1 per unit of risk. If you would invest 1,765 in Guangzhou KDT Machinery on November 6, 2024 and sell it today you would lose (33.00) from holding Guangzhou KDT Machinery or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KDT Machinery vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Guangzhou KDT Machinery |
| Chongqing Changan |
Guangzhou KDT and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KDT and Chongqing Changan
The main advantage of trading using opposite Guangzhou KDT and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KDT 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.| Guangzhou KDT vs. Fujian Oriental Silver | Guangzhou KDT vs. Shijiazhuang Tonhe Electronics | Guangzhou KDT vs. JCHX Mining Management | Guangzhou KDT vs. Pengxin International Mining |
| Chongqing Changan vs. Xiandai Investment Co | Chongqing Changan vs. Zoje Resources Investment | Chongqing Changan vs. Harbin Hatou Investment | Chongqing Changan vs. Newcapec Electronics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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