Correlation Between Chongqing Changan and Aluminum Corp
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By analyzing existing cross correlation between Chongqing Changan Automobile and Aluminum Corp of, you can compare the effects of market volatilities on Chongqing Changan and Aluminum Corp 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 Changan with a short position of Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Aluminum Corp.
Diversification Opportunities for Chongqing Changan and Aluminum Corp
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Aluminum is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Aluminum Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum Corp and Chongqing Changan 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 Changan Automobile are associated (or correlated) with Aluminum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum Corp has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Aluminum Corp go up and down completely randomly.
Pair Corralation between Chongqing Changan and Aluminum Corp
Assuming the 90 days trading horizon Chongqing Changan is expected to generate 2.89 times less return on investment than Aluminum Corp. But when comparing it to its historical volatility, Chongqing Changan Automobile is 1.35 times less risky than Aluminum Corp. It trades about 0.03 of its potential returns per unit of risk. Aluminum Corp of is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 466.00 in Aluminum Corp of on August 31, 2024 and sell it today you would earn a total of 286.00 from holding Aluminum Corp of or generate 61.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Changan Automobile vs. Aluminum Corp of
Performance |
| Timeline |
| Chongqing Changan |
| Aluminum Corp |
Chongqing Changan and Aluminum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Changan and Aluminum Corp
The main advantage of trading using opposite Chongqing Changan and Aluminum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Aluminum Corp 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 Aluminum Corp will offset losses from the drop in Aluminum Corp's long position.| Chongqing Changan vs. Cangzhou Mingzhu Plastic | Chongqing Changan vs. Shaanxi Meineng Clean | Chongqing Changan vs. Heilongjiang Transport Development | Chongqing Changan vs. Guizhou BroadcastingTV Info |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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