Correlation Between Chongqing Brewery and Digital China
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By analyzing existing cross correlation between Chongqing Brewery Co and Digital China Information, you can compare the effects of market volatilities on Chongqing Brewery and Digital China 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 Brewery with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Digital China.
Diversification Opportunities for Chongqing Brewery and Digital China
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chongqing and Digital is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and Chongqing Brewery 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 Brewery Co are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Digital China go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Digital China
Assuming the 90 days trading horizon Chongqing Brewery is expected to generate 8.32 times less return on investment than Digital China. But when comparing it to its historical volatility, Chongqing Brewery Co is 3.89 times less risky than Digital China. It trades about 0.21 of its potential returns per unit of risk. Digital China Information is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 1,091 in Digital China Information on November 27, 2024 and sell it today you would earn a total of 262.00 from holding Digital China Information or generate 24.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Digital China Information
Performance |
| Timeline |
| Chongqing Brewery |
| Digital China Information |
Chongqing Brewery and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Digital China
The main advantage of trading using opposite Chongqing Brewery and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Chongqing Brewery vs. Vohringer Home Technology | Chongqing Brewery vs. A Zenith Home Furnishings | Chongqing Brewery vs. Jason Furniture | Chongqing Brewery vs. Strait Innovation Internet |
| Digital China vs. Shanghai Action Education | Digital China vs. Heilongjiang Publishing Media | Digital China vs. Jiangxi Lianchuang Opto electronic | Digital China vs. Qtone Education Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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