Correlation Between Chongqing Zhifei and Chengdu Xingrong
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By analyzing existing cross correlation between Chongqing Zhifei Bio and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Chongqing Zhifei and Chengdu Xingrong 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 Zhifei with a short position of Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Zhifei and Chengdu Xingrong.
Diversification Opportunities for Chongqing Zhifei and Chengdu Xingrong
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Chengdu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Zhifei Bio and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv and Chongqing Zhifei 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 Zhifei Bio are associated (or correlated) with Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Chongqing Zhifei i.e., Chongqing Zhifei and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Chongqing Zhifei and Chengdu Xingrong
Assuming the 90 days trading horizon Chongqing Zhifei Bio is expected to under-perform the Chengdu Xingrong. In addition to that, Chongqing Zhifei is 1.81 times more volatile than Chengdu Xingrong Investment. It trades about -0.15 of its total potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about -0.16 per unit of volatility. If you would invest 750.00 in Chengdu Xingrong Investment on September 13, 2024 and sell it today you would lose (36.00) from holding Chengdu Xingrong Investment or give up 4.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chongqing Zhifei Bio vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Chongqing Zhifei Bio |
| Chengdu Xingrong Inv |
Chongqing Zhifei and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Zhifei and Chengdu Xingrong
The main advantage of trading using opposite Chongqing Zhifei and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Zhifei position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Chongqing Zhifei vs. Industrial and Commercial | Chongqing Zhifei vs. China Construction Bank | Chongqing Zhifei vs. Bank of China | Chongqing Zhifei vs. Agricultural Bank of |
| Chengdu Xingrong vs. Biwin Storage Technology | Chengdu Xingrong vs. PetroChina Co Ltd | Chengdu Xingrong vs. Industrial and Commercial | Chengdu Xingrong vs. China Construction Bank |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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