Correlation Between Contemporary Amperex and China Union
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By analyzing existing cross correlation between Contemporary Amperex Technology and China Union Holdings, you can compare the effects of market volatilities on Contemporary Amperex and China Union 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 Contemporary Amperex with a short position of China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contemporary Amperex and China Union.
Diversification Opportunities for Contemporary Amperex and China Union
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Contemporary and China is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Contemporary Amperex Technolog and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings and Contemporary Amperex 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 Contemporary Amperex Technology are associated (or correlated) with China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Contemporary Amperex i.e., Contemporary Amperex and China Union go up and down completely randomly.
Pair Corralation between Contemporary Amperex and China Union
Assuming the 90 days trading horizon Contemporary Amperex Technology is expected to generate 1.08 times more return on investment than China Union. However, Contemporary Amperex is 1.08 times more volatile than China Union Holdings. It trades about 0.01 of its potential returns per unit of risk. China Union Holdings is currently generating about 0.0 per unit of risk. If you would invest 25,220 in Contemporary Amperex Technology on October 15, 2024 and sell it today you would lose (620.00) from holding Contemporary Amperex Technology or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contemporary Amperex Technolog vs. China Union Holdings
Performance |
| Timeline |
| Contemporary Amperex |
| China Union Holdings |
Contemporary Amperex and China Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contemporary Amperex and China Union
The main advantage of trading using opposite Contemporary Amperex and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contemporary Amperex position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.The idea behind Contemporary Amperex Technology and China Union Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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