Correlation Between Chongqing Road and Hainan Shuangcheng
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By analyzing existing cross correlation between Chongqing Road Bridge and Hainan Shuangcheng Pharmaceut, you can compare the effects of market volatilities on Chongqing Road and Hainan Shuangcheng 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 Hainan Shuangcheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Hainan Shuangcheng.
Diversification Opportunities for Chongqing Road and Hainan Shuangcheng
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Hainan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Hainan Shuangcheng Pharmaceut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Shuangcheng 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 Hainan Shuangcheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Shuangcheng has no effect on the direction of Chongqing Road i.e., Chongqing Road and Hainan Shuangcheng go up and down completely randomly.
Pair Corralation between Chongqing Road and Hainan Shuangcheng
Assuming the 90 days trading horizon Chongqing Road is expected to generate 3.5 times less return on investment than Hainan Shuangcheng. But when comparing it to its historical volatility, Chongqing Road Bridge is 1.47 times less risky than Hainan Shuangcheng. It trades about 0.04 of its potential returns per unit of risk. Hainan Shuangcheng Pharmaceut is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 652.00 in Hainan Shuangcheng Pharmaceut on August 29, 2024 and sell it today you would earn a total of 1,798 from holding Hainan Shuangcheng Pharmaceut or generate 275.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Road Bridge vs. Hainan Shuangcheng Pharmaceut
Performance |
| Timeline |
| Chongqing Road Bridge |
| Hainan Shuangcheng |
Chongqing Road and Hainan Shuangcheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Hainan Shuangcheng
The main advantage of trading using opposite Chongqing Road and Hainan Shuangcheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road position performs unexpectedly, Hainan Shuangcheng 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 Hainan Shuangcheng will offset losses from the drop in Hainan Shuangcheng's long position.| Chongqing Road vs. Industrial and Commercial | Chongqing Road vs. China Construction Bank | Chongqing Road vs. Agricultural Bank of | Chongqing Road vs. Bank of China |
| Hainan Shuangcheng vs. Industrial and Commercial | Hainan Shuangcheng vs. Agricultural Bank of | Hainan Shuangcheng vs. China Construction Bank | Hainan Shuangcheng vs. Bank of China |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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