Correlation Between Chongqing Brewery and Wuxi Lead
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By analyzing existing cross correlation between Chongqing Brewery Co and Wuxi Lead Auto, you can compare the effects of market volatilities on Chongqing Brewery and Wuxi Lead 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 Wuxi Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Wuxi Lead.
Diversification Opportunities for Chongqing Brewery and Wuxi Lead
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chongqing and Wuxi is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Wuxi Lead Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Lead Auto 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 Wuxi Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Lead Auto has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Wuxi Lead go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Wuxi Lead
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to generate 0.61 times more return on investment than Wuxi Lead. However, Chongqing Brewery Co is 1.64 times less risky than Wuxi Lead. It trades about -0.38 of its potential returns per unit of risk. Wuxi Lead Auto is currently generating about -0.25 per unit of risk. If you would invest 6,390 in Chongqing Brewery Co on October 21, 2024 and sell it today you would lose (723.00) from holding Chongqing Brewery Co or give up 11.31% 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. Wuxi Lead Auto
Performance |
| Timeline |
| Chongqing Brewery |
| Wuxi Lead Auto |
Chongqing Brewery and Wuxi Lead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Wuxi Lead
The main advantage of trading using opposite Chongqing Brewery and Wuxi Lead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Wuxi Lead 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 Wuxi Lead will offset losses from the drop in Wuxi Lead's long position.| Chongqing Brewery vs. Beijing Kingsoft Office | Chongqing Brewery vs. AUPU Home Style | Chongqing Brewery vs. Nanxing Furniture Machinery | Chongqing Brewery vs. Longmaster Information Tech |
| Wuxi Lead vs. Digiwin Software Co | Wuxi Lead vs. Easyhome New Retail | Wuxi Lead vs. Guangzhou KingTeller Technology | Wuxi Lead vs. Olympic Circuit 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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