Correlation Between Chongqing Brewery and Shanghai Phichem
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By analyzing existing cross correlation between Chongqing Brewery Co and Shanghai Phichem Material, you can compare the effects of market volatilities on Chongqing Brewery and Shanghai Phichem 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 Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Shanghai Phichem.
Diversification Opportunities for Chongqing Brewery and Shanghai Phichem
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chongqing and Shanghai is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material 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 Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Shanghai Phichem go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Shanghai Phichem
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to under-perform the Shanghai Phichem. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Brewery Co is 1.66 times less risky than Shanghai Phichem. The stock trades about -0.14 of its potential returns per unit of risk. The Shanghai Phichem Material is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,654 in Shanghai Phichem Material on October 17, 2024 and sell it today you would lose (109.00) from holding Shanghai Phichem Material or give up 6.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Shanghai Phichem Material
Performance |
| Timeline |
| Chongqing Brewery |
| Shanghai Phichem Material |
Chongqing Brewery and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Shanghai Phichem
The main advantage of trading using opposite Chongqing Brewery and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Shanghai Phichem 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 Shanghai Phichem will offset losses from the drop in Shanghai Phichem's long position.| Chongqing Brewery vs. Union Semiconductor Co | Chongqing Brewery vs. Sichuan Jinshi Technology | Chongqing Brewery vs. Shanghai Shibei Hi Tech | Chongqing Brewery vs. Nanjing Putian Telecommunications |
| Shanghai Phichem vs. Guangxi Wuzhou Communications | Shanghai Phichem vs. Eastroc Beverage Group | Shanghai Phichem vs. Chongqing Brewery Co | Shanghai Phichem vs. Great Sun Foods Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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