Correlation Between Shenzhen Kexin and Chongqing Changan
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Chongqing Changan Automobile, you can compare the effects of market volatilities on Shenzhen Kexin 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 Shenzhen Kexin with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Chongqing Changan.
Diversification Opportunities for Shenzhen Kexin and Chongqing Changan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Chongqing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Shenzhen Kexin 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 Shenzhen Kexin Communication 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 Shenzhen Kexin i.e., Shenzhen Kexin and Chongqing Changan go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Chongqing Changan
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to under-perform the Chongqing Changan. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Kexin Communication is 1.01 times less risky than Chongqing Changan. The stock trades about -0.22 of its potential returns per unit of risk. The Chongqing Changan Automobile is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,327 in Chongqing Changan Automobile on September 1, 2024 and sell it today you would earn a total of 54.00 from holding Chongqing Changan Automobile or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Kexin Communication vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Shenzhen Kexin Commu |
| Chongqing Changan |
Shenzhen Kexin and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Kexin and Chongqing Changan
The main advantage of trading using opposite Shenzhen Kexin and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin 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.| Shenzhen Kexin vs. Industrial and Commercial | Shenzhen Kexin vs. Kweichow Moutai Co | Shenzhen Kexin vs. Agricultural Bank of | Shenzhen Kexin vs. China Mobile Limited |
| Chongqing Changan vs. Biwin Storage Technology | Chongqing Changan vs. PetroChina Co Ltd | Chongqing Changan vs. Industrial and Commercial | Chongqing Changan 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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