Correlation Between Chongqing Shunbo and Changchun Faway
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By analyzing existing cross correlation between Chongqing Shunbo Aluminum and Changchun Faway Automobile, you can compare the effects of market volatilities on Chongqing Shunbo and Changchun Faway 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 Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Shunbo and Changchun Faway.
Diversification Opportunities for Chongqing Shunbo and Changchun Faway
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Changchun is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Shunbo Aluminum and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto 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 Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Chongqing Shunbo i.e., Chongqing Shunbo and Changchun Faway go up and down completely randomly.
Pair Corralation between Chongqing Shunbo and Changchun Faway
Assuming the 90 days trading horizon Chongqing Shunbo Aluminum is expected to generate 0.92 times more return on investment than Changchun Faway. However, Chongqing Shunbo Aluminum is 1.09 times less risky than Changchun Faway. It trades about 0.04 of its potential returns per unit of risk. Changchun Faway Automobile is currently generating about -0.01 per unit of risk. If you would invest 649.00 in Chongqing Shunbo Aluminum on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Chongqing Shunbo Aluminum or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Shunbo Aluminum vs. Changchun Faway Automobile
Performance |
| Timeline |
| Chongqing Shunbo Aluminum |
| Changchun Faway Auto |
Chongqing Shunbo and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Shunbo and Changchun Faway
The main advantage of trading using opposite Chongqing Shunbo and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Shunbo position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| Chongqing Shunbo vs. Wanhua Chemical Group | Chongqing Shunbo vs. Shandong Gold Mining | Chongqing Shunbo vs. Rongsheng Petrochemical Co | Chongqing Shunbo vs. Inner Mongolia BaoTou |
| Changchun Faway vs. Miracll Chemicals Co | Changchun Faway vs. Guangzhou KingTeller Technology | Changchun Faway vs. Nantong Jiangshan Agrochemical | Changchun Faway vs. Shanghai Jinfeng Wine |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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