Correlation Between China Resources and Chongqing Changan
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By analyzing existing cross correlation between China Resources Boya and Chongqing Changan Automobile, you can compare the effects of market volatilities on China Resources 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 China Resources with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Chongqing Changan.
Diversification Opportunities for China Resources and Chongqing Changan
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Chongqing is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Boya and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and China Resources 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 China Resources Boya 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 China Resources i.e., China Resources and Chongqing Changan go up and down completely randomly.
Pair Corralation between China Resources and Chongqing Changan
Assuming the 90 days trading horizon China Resources Boya is expected to generate 0.91 times more return on investment than Chongqing Changan. However, China Resources Boya is 1.1 times less risky than Chongqing Changan. It trades about 0.05 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.2 per unit of risk. If you would invest 3,024 in China Resources Boya on September 18, 2024 and sell it today you would earn a total of 46.00 from holding China Resources Boya or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Resources Boya vs. Chongqing Changan Automobile
Performance |
| Timeline |
| China Resources Boya |
| Chongqing Changan |
China Resources and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Chongqing Changan
The main advantage of trading using opposite China Resources and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources 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.| China Resources vs. Chongqing Changan Automobile | China Resources vs. Suzhou Douson Drilling | China Resources vs. Cicc Fund Management | China Resources vs. CICC Fund Management |
| Chongqing Changan vs. Cambricon Technologies Corp | Chongqing Changan vs. Loongson Technology Corp | Chongqing Changan vs. Shenzhen Fortune Trend | Chongqing Changan vs. Chongqing Road Bridge |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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