Correlation Between Chongqing Brewery and Shenzhen Clou
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By analyzing existing cross correlation between Chongqing Brewery Co and Shenzhen Clou Electronics, you can compare the effects of market volatilities on Chongqing Brewery and Shenzhen Clou 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 Shenzhen Clou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Shenzhen Clou.
Diversification Opportunities for Chongqing Brewery and Shenzhen Clou
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Shenzhen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Shenzhen Clou Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Clou Electronics 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 Shenzhen Clou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Clou Electronics has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Shenzhen Clou go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Shenzhen Clou
Assuming the 90 days trading horizon Chongqing Brewery is expected to generate 8.4 times less return on investment than Shenzhen Clou. But when comparing it to its historical volatility, Chongqing Brewery Co is 1.54 times less risky than Shenzhen Clou. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Clou Electronics is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 417.00 in Shenzhen Clou Electronics on August 25, 2024 and sell it today you would earn a total of 56.00 from holding Shenzhen Clou Electronics or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Shenzhen Clou Electronics
Performance |
| Timeline |
| Chongqing Brewery |
| Shenzhen Clou Electronics |
Chongqing Brewery and Shenzhen Clou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Shenzhen Clou
The main advantage of trading using opposite Chongqing Brewery and Shenzhen Clou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Shenzhen Clou 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 Shenzhen Clou will offset losses from the drop in Shenzhen Clou'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 |
| Shenzhen Clou vs. Sunwave Communications Co | Shenzhen Clou vs. Zhejiang Qianjiang Motorcycle | Shenzhen Clou vs. Chongqing Brewery Co | Shenzhen Clou vs. State Grid InformationCommunication |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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