Correlation Between Changshu Ruite and Changshu Tongrun
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By analyzing existing cross correlation between Changshu Ruite Electric and Changshu Tongrun Auto, you can compare the effects of market volatilities on Changshu Ruite and Changshu Tongrun 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 Changshu Ruite with a short position of Changshu Tongrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Ruite and Changshu Tongrun.
Diversification Opportunities for Changshu Ruite and Changshu Tongrun
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changshu and Changshu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Ruite Electric and Changshu Tongrun Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Tongrun Auto and Changshu Ruite 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 Changshu Ruite Electric are associated (or correlated) with Changshu Tongrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Tongrun Auto has no effect on the direction of Changshu Ruite i.e., Changshu Ruite and Changshu Tongrun go up and down completely randomly.
Pair Corralation between Changshu Ruite and Changshu Tongrun
Assuming the 90 days trading horizon Changshu Ruite is expected to generate 2.48 times less return on investment than Changshu Tongrun. But when comparing it to its historical volatility, Changshu Ruite Electric is 1.34 times less risky than Changshu Tongrun. It trades about 0.04 of its potential returns per unit of risk. Changshu Tongrun Auto is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,785 in Changshu Tongrun Auto on September 1, 2024 and sell it today you would earn a total of 91.00 from holding Changshu Tongrun Auto or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Changshu Ruite Electric vs. Changshu Tongrun Auto
Performance |
| Timeline |
| Changshu Ruite Electric |
| Changshu Tongrun Auto |
Changshu Ruite and Changshu Tongrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Ruite and Changshu Tongrun
The main advantage of trading using opposite Changshu Ruite and Changshu Tongrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Ruite position performs unexpectedly, Changshu Tongrun 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 Changshu Tongrun will offset losses from the drop in Changshu Tongrun's long position.| Changshu Ruite vs. Cultural Investment Holdings | Changshu Ruite vs. Gome Telecom Equipment | Changshu Ruite vs. Bus Online Co | Changshu Ruite vs. Holitech Technology Co |
| Changshu Tongrun vs. CITIC Guoan Information | Changshu Tongrun vs. Invengo Information Technology | Changshu Tongrun vs. China Asset Management | Changshu Tongrun vs. Digital China Information |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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