Correlation Between Contemporary Amperex and China National
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By analyzing existing cross correlation between Contemporary Amperex Technology and China National Software, you can compare the effects of market volatilities on Contemporary Amperex and China National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contemporary Amperex and China National.
Diversification Opportunities for Contemporary Amperex and China National
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 National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of Contemporary Amperex i.e., Contemporary Amperex and China National go up and down completely randomly.
Pair Corralation between Contemporary Amperex and China National
Assuming the 90 days trading horizon Contemporary Amperex Technology is expected to generate 0.8 times more return on investment than China National. However, Contemporary Amperex Technology is 1.25 times less risky than China National. It trades about 0.03 of its potential returns per unit of risk. China National Software is currently generating about 0.01 per unit of risk. If you would invest 21,641 in Contemporary Amperex Technology on November 29, 2024 and sell it today you would earn a total of 5,359 from holding Contemporary Amperex Technology or generate 24.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Contemporary Amperex Technolog vs. China National Software
Performance |
| Timeline |
| Contemporary Amperex |
| China National Software |
Contemporary Amperex and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contemporary Amperex and China National
The main advantage of trading using opposite Contemporary Amperex and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contemporary Amperex position performs unexpectedly, China National 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 National will offset losses from the drop in China National's long position.The idea behind Contemporary Amperex Technology and China National Software 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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