Correlation Between 516220 and Changchun Faway
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By analyzing existing cross correlation between 516220 and Changchun Faway Automobile, you can compare the effects of market volatilities on 516220 and Changchun Faway 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 516220 with a short position of Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of 516220 and Changchun Faway.
Diversification Opportunities for 516220 and Changchun Faway
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 516220 and Changchun is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding 516220 and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto and 516220 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 516220 are associated (or correlated) with Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of 516220 i.e., 516220 and Changchun Faway go up and down completely randomly.
Pair Corralation between 516220 and Changchun Faway
Assuming the 90 days trading horizon 516220 is expected to under-perform the Changchun Faway. But the etf apears to be less risky and, when comparing its historical volatility, 516220 is 1.35 times less risky than Changchun Faway. The etf trades about -0.03 of its potential returns per unit of risk. The Changchun Faway Automobile is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 895.00 in Changchun Faway Automobile on August 24, 2024 and sell it today you would earn a total of 80.00 from holding Changchun Faway Automobile or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
516220 vs. Changchun Faway Automobile
Performance |
| Timeline |
| 516220 |
| Changchun Faway Auto |
516220 and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 516220 and Changchun Faway
The main advantage of trading using opposite 516220 and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 516220 position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.The idea behind 516220 and Changchun Faway Automobile 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.| Changchun Faway vs. Shenzhen Zhongzhuang Construction | Changchun Faway vs. Kuangda Technology Group | Changchun Faway vs. Glodon Software Co | Changchun Faway vs. Hubei Forbon Technology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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