Correlation Between Lepu Medical and Chongqing Changan
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By analyzing existing cross correlation between Lepu Medical Tech and Chongqing Changan Automobile, you can compare the effects of market volatilities on Lepu Medical and Chongqing Changan 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 Lepu Medical with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepu Medical and Chongqing Changan.
Diversification Opportunities for Lepu Medical and Chongqing Changan
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lepu and Chongqing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lepu Medical Tech and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Lepu Medical 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 Lepu Medical Tech are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Lepu Medical i.e., Lepu Medical and Chongqing Changan go up and down completely randomly.
Pair Corralation between Lepu Medical and Chongqing Changan
Assuming the 90 days trading horizon Lepu Medical Tech is expected to under-perform the Chongqing Changan. In addition to that, Lepu Medical is 1.17 times more volatile than Chongqing Changan Automobile. It trades about -0.27 of its total potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.29 per unit of volatility. If you would invest 1,386 in Chongqing Changan Automobile on October 18, 2024 and sell it today you would lose (120.00) from holding Chongqing Changan Automobile or give up 8.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lepu Medical Tech vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Lepu Medical Tech |
| Chongqing Changan |
Lepu Medical and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepu Medical and Chongqing Changan
The main advantage of trading using opposite Lepu Medical and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepu Medical position performs unexpectedly, Chongqing Changan 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 Chongqing Changan will offset losses from the drop in Chongqing Changan's long position.| Lepu Medical vs. Wuhan Yangtze Communication | Lepu Medical vs. Dosilicon Co | Lepu Medical vs. Jinsanjiang Silicon Material | Lepu Medical vs. Zhejiang JIULI Hi tech |
| Chongqing Changan vs. Hunan Investment Group | Chongqing Changan vs. Heilongjiang Publishing Media | Chongqing Changan vs. China Publishing Media | Chongqing Changan vs. Guangzhou Jinyi Media |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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