Correlation Between Chongqing Shunbo and Allied Machinery
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By analyzing existing cross correlation between Chongqing Shunbo Aluminum and Allied Machinery Co, you can compare the effects of market volatilities on Chongqing Shunbo and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Shunbo and Allied Machinery.
Diversification Opportunities for Chongqing Shunbo and Allied Machinery
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Allied is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Shunbo Aluminum and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Chongqing Shunbo i.e., Chongqing Shunbo and Allied Machinery go up and down completely randomly.
Pair Corralation between Chongqing Shunbo and Allied Machinery
Assuming the 90 days trading horizon Chongqing Shunbo Aluminum is expected to under-perform the Allied Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Shunbo Aluminum is 2.32 times less risky than Allied Machinery. The stock trades about -0.17 of its potential returns per unit of risk. The Allied Machinery Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,714 in Allied Machinery Co on October 11, 2024 and sell it today you would earn a total of 211.00 from holding Allied Machinery Co or generate 12.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Shunbo Aluminum vs. Allied Machinery Co
Performance |
| Timeline |
| Chongqing Shunbo Aluminum |
| Allied Machinery |
Chongqing Shunbo and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Shunbo and Allied Machinery
The main advantage of trading using opposite Chongqing Shunbo and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Shunbo position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| Chongqing Shunbo vs. Nanning Chemical Industry | Chongqing Shunbo vs. Ningxia Younglight Chemicals | Chongqing Shunbo vs. Harbin Hatou Investment | Chongqing Shunbo vs. Postal Savings Bank |
| Allied Machinery vs. Ping An Insurance | Allied Machinery vs. Chongqing Shunbo Aluminum | Allied Machinery vs. Jiangsu Financial Leasing | Allied Machinery vs. Unisplendour Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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