Correlation Between China Asset and Changshu Tongrun
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By analyzing existing cross correlation between China Asset Management and Changshu Tongrun Auto, you can compare the effects of market volatilities on China Asset and Changshu Tongrun 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 China Asset with a short position of Changshu Tongrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and Changshu Tongrun.
Diversification Opportunities for China Asset and Changshu Tongrun
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Changshu is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management and Changshu Tongrun Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Tongrun Auto and China Asset 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 China Asset Management are associated (or correlated) with Changshu Tongrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Tongrun Auto has no effect on the direction of China Asset i.e., China Asset and Changshu Tongrun go up and down completely randomly.
Pair Corralation between China Asset and Changshu Tongrun
Assuming the 90 days trading horizon China Asset Management is expected to under-perform the Changshu Tongrun. But the stock apears to be less risky and, when comparing its historical volatility, China Asset Management is 2.36 times less risky than Changshu Tongrun. The stock trades about -0.42 of its potential returns per unit of risk. The Changshu Tongrun Auto is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,716 in Changshu Tongrun Auto on December 1, 2024 and sell it today you would earn a total of 111.00 from holding Changshu Tongrun Auto or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Asset Management vs. Changshu Tongrun Auto
Performance |
| Timeline |
| China Asset Management |
| Changshu Tongrun Auto |
China Asset and Changshu Tongrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Asset and Changshu Tongrun
The main advantage of trading using opposite China Asset and Changshu Tongrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset position performs unexpectedly, Changshu Tongrun 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 Changshu Tongrun will offset losses from the drop in Changshu Tongrun's long position.| China Asset vs. Jiangsu Jinling Sports | China Asset vs. Chengtun Mining Group | China Asset vs. Jiangxi Copper Co | China Asset vs. Shanghai Yanpu Metal |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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