Correlation Between Chengdu Bright and Anhui Transport
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By analyzing existing cross correlation between Chengdu Bright Eye and Anhui Transport Consulting, you can compare the effects of market volatilities on Chengdu Bright and Anhui Transport 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 Chengdu Bright with a short position of Anhui Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Bright and Anhui Transport.
Diversification Opportunities for Chengdu Bright and Anhui Transport
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Anhui is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Bright Eye and Anhui Transport Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Transport Cons and Chengdu Bright 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 Chengdu Bright Eye are associated (or correlated) with Anhui Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Transport Cons has no effect on the direction of Chengdu Bright i.e., Chengdu Bright and Anhui Transport go up and down completely randomly.
Pair Corralation between Chengdu Bright and Anhui Transport
Assuming the 90 days trading horizon Chengdu Bright Eye is expected to under-perform the Anhui Transport. In addition to that, Chengdu Bright is 1.92 times more volatile than Anhui Transport Consulting. It trades about -0.24 of its total potential returns per unit of risk. Anhui Transport Consulting is currently generating about -0.13 per unit of volatility. If you would invest 903.00 in Anhui Transport Consulting on October 24, 2024 and sell it today you would lose (34.00) from holding Anhui Transport Consulting or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Bright Eye vs. Anhui Transport Consulting
Performance |
| Timeline |
| Chengdu Bright Eye |
| Anhui Transport Cons |
Chengdu Bright and Anhui Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Bright and Anhui Transport
The main advantage of trading using opposite Chengdu Bright and Anhui Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Bright position performs unexpectedly, Anhui Transport 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 Anhui Transport will offset losses from the drop in Anhui Transport's long position.| Chengdu Bright vs. Anhui Tongguan Copper | Chengdu Bright vs. Linzhou Heavy Machinery | Chengdu Bright vs. Ye Chiu Metal | Chengdu Bright vs. Gifore Agricultural Machinery |
| Anhui Transport vs. Threes Company Media | Anhui Transport vs. Changjiang Publishing Media | Anhui Transport vs. Ciwen Media Co | Anhui Transport vs. Beijing Enlight Media |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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