Correlation Between Chongqing Road and Shandong Hongchuang
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By analyzing existing cross correlation between Chongqing Road Bridge and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Chongqing Road and Shandong Hongchuang 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 Road with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Shandong Hongchuang.
Diversification Opportunities for Chongqing Road and Shandong Hongchuang
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chongqing and Shandong is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Chongqing Road 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 Road Bridge are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Chongqing Road i.e., Chongqing Road and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Chongqing Road and Shandong Hongchuang
Assuming the 90 days trading horizon Chongqing Road Bridge is expected to under-perform the Shandong Hongchuang. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Road Bridge is 1.06 times less risky than Shandong Hongchuang. The stock trades about -0.17 of its potential returns per unit of risk. The Shandong Hongchuang Aluminum is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 697.00 in Shandong Hongchuang Aluminum on October 22, 2024 and sell it today you would earn a total of 297.00 from holding Shandong Hongchuang Aluminum or generate 42.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Chongqing Road Bridge vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Chongqing Road Bridge |
| Shandong Hongchuang |
Chongqing Road and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Shandong Hongchuang
The main advantage of trading using opposite Chongqing Road and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Chongqing Road vs. Jinsanjiang Silicon Material | Chongqing Road vs. Longxing Chemical Stock | Chongqing Road vs. Yangmei Chemical Co | Chongqing Road vs. Hoshine Silicon Ind |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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