Correlation Between Contemporary Amperex and Penghua Shenzhen
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By analyzing existing cross correlation between Contemporary Amperex Technology and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Contemporary Amperex and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contemporary Amperex and Penghua Shenzhen.
Diversification Opportunities for Contemporary Amperex and Penghua Shenzhen
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Contemporary and Penghua is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Contemporary Amperex Technolog and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Contemporary Amperex i.e., Contemporary Amperex and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Contemporary Amperex and Penghua Shenzhen
Assuming the 90 days trading horizon Contemporary Amperex Technology is expected to generate 3.54 times more return on investment than Penghua Shenzhen. However, Contemporary Amperex is 3.54 times more volatile than Penghua Shenzhen Energy. It trades about 0.11 of its potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.08 per unit of risk. If you would invest 14,545 in Contemporary Amperex Technology on August 29, 2024 and sell it today you would earn a total of 11,127 from holding Contemporary Amperex Technology or generate 76.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contemporary Amperex Technolog vs. Penghua Shenzhen Energy
Performance |
| Timeline |
| Contemporary Amperex |
| Penghua Shenzhen Energy |
Contemporary Amperex and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contemporary Amperex and Penghua Shenzhen
The main advantage of trading using opposite Contemporary Amperex and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contemporary Amperex position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen's long position.The idea behind Contemporary Amperex Technology and Penghua Shenzhen Energy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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