Correlation Between Chengdu Spaceon and Tonghua Grape
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By analyzing existing cross correlation between Chengdu Spaceon Electronics and Tonghua Grape Wine, you can compare the effects of market volatilities on Chengdu Spaceon and Tonghua Grape 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 Chengdu Spaceon with a short position of Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Spaceon and Tonghua Grape.
Diversification Opportunities for Chengdu Spaceon and Tonghua Grape
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Tonghua is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Spaceon Electronics and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine and Chengdu Spaceon 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 Chengdu Spaceon Electronics are associated (or correlated) with Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of Chengdu Spaceon i.e., Chengdu Spaceon and Tonghua Grape go up and down completely randomly.
Pair Corralation between Chengdu Spaceon and Tonghua Grape
Assuming the 90 days trading horizon Chengdu Spaceon Electronics is expected to generate 1.22 times more return on investment than Tonghua Grape. However, Chengdu Spaceon is 1.22 times more volatile than Tonghua Grape Wine. It trades about 0.02 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about -0.02 per unit of risk. If you would invest 1,542 in Chengdu Spaceon Electronics on September 4, 2024 and sell it today you would earn a total of 64.00 from holding Chengdu Spaceon Electronics or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Spaceon Electronics vs. Tonghua Grape Wine
Performance |
| Timeline |
| Chengdu Spaceon Elec |
| Tonghua Grape Wine |
Chengdu Spaceon and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Spaceon and Tonghua Grape
The main advantage of trading using opposite Chengdu Spaceon and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Spaceon position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| Chengdu Spaceon vs. Xinjiang Baodi Mining | Chengdu Spaceon vs. Shengda Mining Co | Chengdu Spaceon vs. Pengxin International Mining | Chengdu Spaceon vs. China Life Insurance |
| Tonghua Grape vs. Chengdu Spaceon Electronics | Tonghua Grape vs. Qingdao Foods Co | Tonghua Grape vs. AVIC Fund Management | Tonghua Grape vs. Jiahe Foods Industry |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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