Correlation Between Chongqing Road and Changjiang Jinggong
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By analyzing existing cross correlation between Chongqing Road Bridge and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Chongqing Road and Changjiang Jinggong 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 Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Changjiang Jinggong.
Diversification Opportunities for Chongqing Road and Changjiang Jinggong
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Changjiang is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel 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 Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of Chongqing Road i.e., Chongqing Road and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between Chongqing Road and Changjiang Jinggong
Assuming the 90 days trading horizon Chongqing Road Bridge is expected to generate 1.94 times more return on investment than Changjiang Jinggong. However, Chongqing Road is 1.94 times more volatile than Changjiang Jinggong Steel. It trades about 0.03 of its potential returns per unit of risk. Changjiang Jinggong Steel is currently generating about -0.04 per unit of risk. If you would invest 503.00 in Chongqing Road Bridge on November 27, 2024 and sell it today you would earn a total of 109.00 from holding Chongqing Road Bridge or generate 21.67% 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. Changjiang Jinggong Steel
Performance |
| Timeline |
| Chongqing Road Bridge |
| Changjiang Jinggong Steel |
Chongqing Road and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Changjiang Jinggong
The main advantage of trading using opposite Chongqing Road and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| Chongqing Road vs. China Eastern Airlines | Chongqing Road vs. Zhejiang Yongjin Metal | Chongqing Road vs. Guangdong Jingyi Metal | Chongqing Road vs. Suzhou Xingye Material |
| Changjiang Jinggong vs. Wuxi Dk Electronic | Changjiang Jinggong vs. Linzhou Heavy Machinery | Changjiang Jinggong vs. Ningxia Xiaoming Agriculture | Changjiang Jinggong vs. Gifore Agricultural Machinery |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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