Correlation Between Chongqing Road and Panda Financial
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By analyzing existing cross correlation between Chongqing Road Bridge and Panda Financial Holding, you can compare the effects of market volatilities on Chongqing Road and Panda Financial 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 Panda Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Panda Financial.
Diversification Opportunities for Chongqing Road and Panda Financial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Panda is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Panda Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Financial Holding 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 Panda Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Financial Holding has no effect on the direction of Chongqing Road i.e., Chongqing Road and Panda Financial go up and down completely randomly.
Pair Corralation between Chongqing Road and Panda Financial
Assuming the 90 days trading horizon Chongqing Road is expected to generate 23.84 times less return on investment than Panda Financial. In addition to that, Chongqing Road is 1.01 times more volatile than Panda Financial Holding. It trades about 0.01 of its total potential returns per unit of risk. Panda Financial Holding is currently generating about 0.36 per unit of volatility. If you would invest 1,211 in Panda Financial Holding on September 3, 2024 and sell it today you would earn a total of 306.00 from holding Panda Financial Holding or generate 25.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Road Bridge vs. Panda Financial Holding
Performance |
| Timeline |
| Chongqing Road Bridge |
| Panda Financial Holding |
Chongqing Road and Panda Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Panda Financial
The main advantage of trading using opposite Chongqing Road and Panda Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road position performs unexpectedly, Panda Financial 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 Panda Financial will offset losses from the drop in Panda Financial's long position.| Chongqing Road vs. Jiahe Foods Industry | Chongqing Road vs. Xiwang Foodstuffs Co | Chongqing Road vs. Zhongshan Public Utilities | Chongqing Road vs. Jiajia Food Group |
| Panda Financial vs. Chongqing Road Bridge | Panda Financial vs. Wuhan Xianglong Power | Panda Financial vs. Empyrean Technology Co | Panda Financial vs. Yuanjie Semiconductor 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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