Correlation Between China Express and Chongqing Brewery
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By analyzing existing cross correlation between China Express Airlines and Chongqing Brewery Co, you can compare the effects of market volatilities on China Express and Chongqing Brewery 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 China Express with a short position of Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Express and Chongqing Brewery.
Diversification Opportunities for China Express and Chongqing Brewery
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Chongqing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding China Express Airlines and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery and China Express 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 China Express Airlines are associated (or correlated) with Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of China Express i.e., China Express and Chongqing Brewery go up and down completely randomly.
Pair Corralation between China Express and Chongqing Brewery
Assuming the 90 days trading horizon China Express Airlines is expected to under-perform the Chongqing Brewery. But the stock apears to be less risky and, when comparing its historical volatility, China Express Airlines is 1.02 times less risky than Chongqing Brewery. The stock trades about -0.1 of its potential returns per unit of risk. The Chongqing Brewery Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,960 in Chongqing Brewery Co on September 4, 2024 and sell it today you would earn a total of 301.00 from holding Chongqing Brewery Co or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Express Airlines vs. Chongqing Brewery Co
Performance |
| Timeline |
| China Express Airlines |
| Chongqing Brewery |
China Express and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Express and Chongqing Brewery
The main advantage of trading using opposite China Express and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Express position performs unexpectedly, Chongqing Brewery 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 Brewery will offset losses from the drop in Chongqing Brewery's long position.| China Express vs. DO Home Collection | China Express vs. TongFu Microelectronics Co | China Express vs. Shandong Homey Aquatic | China Express vs. Zoy Home Furnishing |
| Chongqing Brewery vs. Beijing Kaiwen Education | Chongqing Brewery vs. Anhui Huaren Health | Chongqing Brewery vs. Hangzhou Coco Healthcare | Chongqing Brewery vs. Xinhua Winshare Publishing |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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