Correlation Between Chongqing Shunbo and Chongqing Changan
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By analyzing existing cross correlation between Chongqing Shunbo Aluminum and Chongqing Changan Automobile, you can compare the effects of market volatilities on Chongqing Shunbo 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 Chongqing Shunbo with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Shunbo and Chongqing Changan.
Diversification Opportunities for Chongqing Shunbo and Chongqing Changan
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Chongqing is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Shunbo Aluminum and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Chongqing Shunbo 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 Chongqing Shunbo Aluminum 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 Chongqing Shunbo i.e., Chongqing Shunbo and Chongqing Changan go up and down completely randomly.
Pair Corralation between Chongqing Shunbo and Chongqing Changan
Assuming the 90 days trading horizon Chongqing Shunbo is expected to generate 2.64 times less return on investment than Chongqing Changan. But when comparing it to its historical volatility, Chongqing Shunbo Aluminum is 1.26 times less risky than Chongqing Changan. It trades about 0.03 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,269 in Chongqing Changan Automobile on December 4, 2024 and sell it today you would earn a total of 31.00 from holding Chongqing Changan Automobile or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Chongqing Shunbo Aluminum vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Chongqing Shunbo Aluminum |
| Chongqing Changan |
Chongqing Shunbo and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Shunbo and Chongqing Changan
The main advantage of trading using opposite Chongqing Shunbo and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Shunbo 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.| Chongqing Shunbo vs. Nuode Investment Co | Chongqing Shunbo vs. Hang Xiao Steel | Chongqing Shunbo vs. Xiandai Investment Co | Chongqing Shunbo vs. Zoje Resources Investment |
| Chongqing Changan vs. Zhongshan Public Utilities | Chongqing Changan vs. Qingdao Foods Co | Chongqing Changan vs. HengFeng Information Technology | Chongqing Changan vs. Muyuan Foodstuff 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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