Correlation Between Chongqing Brewery and Yingde Greatchem
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By analyzing existing cross correlation between Chongqing Brewery Co and Yingde Greatchem Chemicals, you can compare the effects of market volatilities on Chongqing Brewery and Yingde Greatchem 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 Yingde Greatchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Yingde Greatchem.
Diversification Opportunities for Chongqing Brewery and Yingde Greatchem
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Yingde is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Yingde Greatchem Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yingde Greatchem Che 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 Yingde Greatchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yingde Greatchem Che has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Yingde Greatchem go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Yingde Greatchem
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to under-perform the Yingde Greatchem. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Brewery Co is 1.39 times less risky than Yingde Greatchem. The stock trades about -0.05 of its potential returns per unit of risk. The Yingde Greatchem Chemicals is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,850 in Yingde Greatchem Chemicals on September 5, 2024 and sell it today you would lose (1,285) from holding Yingde Greatchem Chemicals or give up 33.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 73.58% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Yingde Greatchem Chemicals
Performance |
| Timeline |
| Chongqing Brewery |
| Yingde Greatchem Che |
Chongqing Brewery and Yingde Greatchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Yingde Greatchem
The main advantage of trading using opposite Chongqing Brewery and Yingde Greatchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Yingde Greatchem 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 Yingde Greatchem will offset losses from the drop in Yingde Greatchem's long position.| Chongqing Brewery vs. Yingde Greatchem Chemicals | Chongqing Brewery vs. Shaanxi Construction Machinery | Chongqing Brewery vs. Caihong Display Devices | Chongqing Brewery vs. Huasi Agricultural Development |
| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Rongsheng Petrochemical 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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