Correlation Between Chongqing Sulian and Shantou Wanshun
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By analyzing existing cross correlation between Chongqing Sulian Plastic and Shantou Wanshun Package, you can compare the effects of market volatilities on Chongqing Sulian and Shantou Wanshun 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 Chongqing Sulian with a short position of Shantou Wanshun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Sulian and Shantou Wanshun.
Diversification Opportunities for Chongqing Sulian and Shantou Wanshun
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Shantou is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Sulian Plastic and Shantou Wanshun Package in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantou Wanshun Package and Chongqing Sulian 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 Chongqing Sulian Plastic are associated (or correlated) with Shantou Wanshun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantou Wanshun Package has no effect on the direction of Chongqing Sulian i.e., Chongqing Sulian and Shantou Wanshun go up and down completely randomly.
Pair Corralation between Chongqing Sulian and Shantou Wanshun
Assuming the 90 days trading horizon Chongqing Sulian is expected to generate 1.47 times less return on investment than Shantou Wanshun. But when comparing it to its historical volatility, Chongqing Sulian Plastic is 1.05 times less risky than Shantou Wanshun. It trades about 0.04 of its potential returns per unit of risk. Shantou Wanshun Package is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 381.00 in Shantou Wanshun Package on October 18, 2024 and sell it today you would earn a total of 83.00 from holding Shantou Wanshun Package or generate 21.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Sulian Plastic vs. Shantou Wanshun Package
Performance |
| Timeline |
| Chongqing Sulian Plastic |
| Shantou Wanshun Package |
Chongqing Sulian and Shantou Wanshun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Sulian and Shantou Wanshun
The main advantage of trading using opposite Chongqing Sulian and Shantou Wanshun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Sulian position performs unexpectedly, Shantou Wanshun 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 Shantou Wanshun will offset losses from the drop in Shantou Wanshun's long position.| Chongqing Sulian vs. Holitech Technology Co | Chongqing Sulian vs. Dhc Software Co | Chongqing Sulian vs. Jinhe Biotechnology Co | Chongqing Sulian vs. Vohringer Home Technology |
| Shantou Wanshun vs. China Mobile Limited | Shantou Wanshun vs. Tongyu Communication | Shantou Wanshun vs. Fibocom Wireless | Shantou Wanshun vs. Sinomach Automobile Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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