Correlation Between Chongqing Shunbo and SAIC
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By analyzing existing cross correlation between Chongqing Shunbo Aluminum and SAIC Motor Corp, you can compare the effects of market volatilities on Chongqing Shunbo and SAIC 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 SAIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Shunbo and SAIC.
Diversification Opportunities for Chongqing Shunbo and SAIC
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chongqing and SAIC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Shunbo Aluminum and SAIC Motor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIC Motor Corp 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 SAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIC Motor Corp has no effect on the direction of Chongqing Shunbo i.e., Chongqing Shunbo and SAIC go up and down completely randomly.
Pair Corralation between Chongqing Shunbo and SAIC
Assuming the 90 days trading horizon Chongqing Shunbo Aluminum is expected to generate 0.57 times more return on investment than SAIC. However, Chongqing Shunbo Aluminum is 1.74 times less risky than SAIC. It trades about -0.08 of its potential returns per unit of risk. SAIC Motor Corp is currently generating about -0.12 per unit of risk. If you would invest 682.00 in Chongqing Shunbo Aluminum on October 16, 2024 and sell it today you would lose (29.00) from holding Chongqing Shunbo Aluminum or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Shunbo Aluminum vs. SAIC Motor Corp
Performance |
| Timeline |
| Chongqing Shunbo Aluminum |
| SAIC Motor Corp |
Chongqing Shunbo and SAIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Shunbo and SAIC
The main advantage of trading using opposite Chongqing Shunbo and SAIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Shunbo position performs unexpectedly, SAIC 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 SAIC will offset losses from the drop in SAIC's long position.The idea behind Chongqing Shunbo Aluminum and SAIC Motor Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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