Correlation Between Chongqing Sulian and Liaoning Chengda
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By analyzing existing cross correlation between Chongqing Sulian Plastic and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Chongqing Sulian and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Sulian and Liaoning Chengda.
Diversification Opportunities for Chongqing Sulian and Liaoning Chengda
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Liaoning is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Sulian Plastic and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Chongqing Sulian i.e., Chongqing Sulian and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Chongqing Sulian and Liaoning Chengda
Assuming the 90 days trading horizon Chongqing Sulian Plastic is expected to under-perform the Liaoning Chengda. In addition to that, Chongqing Sulian is 2.1 times more volatile than Liaoning Chengda Biotechnology. It trades about -0.28 of its total potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.42 per unit of volatility. If you would invest 2,727 in Liaoning Chengda Biotechnology on October 17, 2024 and sell it today you would lose (271.00) from holding Liaoning Chengda Biotechnology or give up 9.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Sulian Plastic vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Chongqing Sulian Plastic |
| Liaoning Chengda Bio |
Chongqing Sulian and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Sulian and Liaoning Chengda
The main advantage of trading using opposite Chongqing Sulian and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Sulian position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Chongqing Sulian vs. Thinkingdom Media Group | Chongqing Sulian vs. Anhui Xinhua Media | Chongqing Sulian vs. Threes Company Media | Chongqing Sulian vs. Beijing Enlight Media |
| Liaoning Chengda vs. CIMC Vehicles Co | Liaoning Chengda vs. China Sports Industry | Liaoning Chengda vs. Tieling Newcity Investment | Liaoning Chengda vs. Hubei Geoway Investment |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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