Correlation Between Chongqing Brewery and HanS Laser
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By analyzing existing cross correlation between Chongqing Brewery Co and HanS Laser Tech, you can compare the effects of market volatilities on Chongqing Brewery and HanS Laser 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 HanS Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and HanS Laser.
Diversification Opportunities for Chongqing Brewery and HanS Laser
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and HanS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and HanS Laser Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HanS Laser Tech 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 HanS Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HanS Laser Tech has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and HanS Laser go up and down completely randomly.
Pair Corralation between Chongqing Brewery and HanS Laser
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to generate 0.45 times more return on investment than HanS Laser. However, Chongqing Brewery Co is 2.2 times less risky than HanS Laser. It trades about -0.03 of its potential returns per unit of risk. HanS Laser Tech is currently generating about -0.08 per unit of risk. If you would invest 6,516 in Chongqing Brewery Co on September 12, 2024 and sell it today you would lose (74.00) from holding Chongqing Brewery Co or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. HanS Laser Tech
Performance |
| Timeline |
| Chongqing Brewery |
| HanS Laser Tech |
Chongqing Brewery and HanS Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and HanS Laser
The main advantage of trading using opposite Chongqing Brewery and HanS Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, HanS Laser 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 HanS Laser will offset losses from the drop in HanS Laser's long position.| Chongqing Brewery vs. China Petroleum Chemical | Chongqing Brewery vs. PetroChina Co Ltd | Chongqing Brewery vs. China State Construction | Chongqing Brewery vs. China Railway Group |
| HanS Laser vs. Agricultural Bank of | HanS Laser vs. Industrial and Commercial | HanS Laser vs. Bank of China | HanS Laser vs. PetroChina Co Ltd |
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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