Correlation Between Chongqing Road and Wuxi Xuelang
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By analyzing existing cross correlation between Chongqing Road Bridge and Wuxi Xuelang Environmental, you can compare the effects of market volatilities on Chongqing Road and Wuxi Xuelang 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 Wuxi Xuelang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Wuxi Xuelang.
Diversification Opportunities for Chongqing Road and Wuxi Xuelang
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Wuxi is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Wuxi Xuelang Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Xuelang Environ 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 Wuxi Xuelang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Xuelang Environ has no effect on the direction of Chongqing Road i.e., Chongqing Road and Wuxi Xuelang go up and down completely randomly.
Pair Corralation between Chongqing Road and Wuxi Xuelang
Assuming the 90 days trading horizon Chongqing Road Bridge is expected to generate 0.91 times more return on investment than Wuxi Xuelang. However, Chongqing Road Bridge is 1.1 times less risky than Wuxi Xuelang. It trades about 0.03 of its potential returns per unit of risk. Wuxi Xuelang Environmental is currently generating about 0.0 per unit of risk. If you would invest 474.00 in Chongqing Road Bridge on October 29, 2024 and sell it today you would earn a total of 71.00 from holding Chongqing Road Bridge or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Road Bridge vs. Wuxi Xuelang Environmental
Performance |
| Timeline |
| Chongqing Road Bridge |
| Wuxi Xuelang Environ |
Chongqing Road and Wuxi Xuelang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Wuxi Xuelang
The main advantage of trading using opposite Chongqing Road and Wuxi Xuelang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road position performs unexpectedly, Wuxi Xuelang 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 Wuxi Xuelang will offset losses from the drop in Wuxi Xuelang's long position.| Chongqing Road vs. Hygon Information Technology | Chongqing Road vs. Anhui Gujing Distillery | Chongqing Road vs. Tieling Newcity Investment | Chongqing Road vs. Beijing Mainstreets Investment |
| Wuxi Xuelang vs. China Longyuan Power | Wuxi Xuelang vs. PetroChina Co Ltd | Wuxi Xuelang vs. Guangxi Guiguan Electric | Wuxi Xuelang vs. Yantai North Andre |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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