Correlation Between Chongqing Shunbo and Hefei Metalforming
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By analyzing existing cross correlation between Chongqing Shunbo Aluminum and Hefei Metalforming Mach, you can compare the effects of market volatilities on Chongqing Shunbo and Hefei Metalforming 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 Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Shunbo and Hefei Metalforming.
Diversification Opportunities for Chongqing Shunbo and Hefei Metalforming
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Hefei is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Shunbo Aluminum and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach 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 Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Chongqing Shunbo i.e., Chongqing Shunbo and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Chongqing Shunbo and Hefei Metalforming
Assuming the 90 days trading horizon Chongqing Shunbo is expected to generate 3.68 times less return on investment than Hefei Metalforming. But when comparing it to its historical volatility, Chongqing Shunbo Aluminum is 1.52 times less risky than Hefei Metalforming. It trades about 0.04 of its potential returns per unit of risk. Hefei Metalforming Mach is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 795.00 in Hefei Metalforming Mach on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Hefei Metalforming Mach or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chongqing Shunbo Aluminum vs. Hefei Metalforming Mach
Performance |
| Timeline |
| Chongqing Shunbo Aluminum |
| Hefei Metalforming Mach |
Chongqing Shunbo and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Shunbo and Hefei Metalforming
The main advantage of trading using opposite Chongqing Shunbo and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Shunbo position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| Chongqing Shunbo vs. Zijin Mining Group | Chongqing Shunbo vs. Wanhua Chemical Group | Chongqing Shunbo vs. Baoshan Iron Steel | Chongqing Shunbo vs. Rongsheng Petrochemical Co |
| Hefei Metalforming vs. Agricultural Bank of | Hefei Metalforming vs. Industrial and Commercial | Hefei Metalforming vs. Bank of China | Hefei Metalforming vs. PetroChina Co Ltd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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