Correlation Between King Strong and Chongqing Changan
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By analyzing existing cross correlation between King Strong New Material and Chongqing Changan Automobile, you can compare the effects of market volatilities on King Strong 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 King Strong with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Strong and Chongqing Changan.
Diversification Opportunities for King Strong and Chongqing Changan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between King and Chongqing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding King Strong New Material and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and King Strong 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 King Strong New Material 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 King Strong i.e., King Strong and Chongqing Changan go up and down completely randomly.
Pair Corralation between King Strong and Chongqing Changan
Assuming the 90 days trading horizon King Strong New Material is expected to under-perform the Chongqing Changan. In addition to that, King Strong is 1.75 times more volatile than Chongqing Changan Automobile. It trades about -0.18 of its total potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.31 per unit of volatility. If you would invest 1,393 in Chongqing Changan Automobile on October 24, 2024 and sell it today you would lose (132.00) from holding Chongqing Changan Automobile or give up 9.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Strong New Material vs. Chongqing Changan Automobile
Performance |
| Timeline |
| King Strong New |
| Chongqing Changan |
King Strong and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Strong and Chongqing Changan
The main advantage of trading using opposite King Strong and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Strong 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.| King Strong vs. Kweichow Moutai Co | King Strong vs. Contemporary Amperex Technology | King Strong vs. Beijing Roborock Technology | King Strong vs. BYD Co Ltd |
| Chongqing Changan vs. PetroChina Co Ltd | Chongqing Changan vs. Gansu Jiu Steel | Chongqing Changan vs. Ming Yang Smart | Chongqing Changan vs. Aba Chemicals Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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