Correlation Between Chongqing Brewery and Shanghai Broadband
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By analyzing existing cross correlation between Chongqing Brewery Co and Shanghai Broadband Technology, you can compare the effects of market volatilities on Chongqing Brewery and Shanghai Broadband 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 Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Shanghai Broadband.
Diversification Opportunities for Chongqing Brewery and Shanghai Broadband
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chongqing and Shanghai is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband 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 Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Shanghai Broadband
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to generate 0.6 times more return on investment than Shanghai Broadband. However, Chongqing Brewery Co is 1.66 times less risky than Shanghai Broadband. It trades about 0.1 of its potential returns per unit of risk. Shanghai Broadband Technology is currently generating about -0.16 per unit of risk. If you would invest 6,176 in Chongqing Brewery Co on September 28, 2024 and sell it today you would earn a total of 244.00 from holding Chongqing Brewery Co or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Chongqing Brewery |
| Shanghai Broadband |
Chongqing Brewery and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Shanghai Broadband
The main advantage of trading using opposite Chongqing Brewery and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Shanghai Broadband 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 Broadband will offset losses from the drop in Shanghai Broadband's long position.| Chongqing Brewery vs. Soyea Technology Co | Chongqing Brewery vs. Linewell Software Co | Chongqing Brewery vs. Shanghai Jinfeng Wine | Chongqing Brewery vs. Jiujiang Shanshui Technology |
| Shanghai Broadband vs. Zijin Mining Group | Shanghai Broadband vs. Wanhua Chemical Group | Shanghai Broadband vs. Baoshan Iron Steel | Shanghai Broadband vs. Shandong Gold Mining |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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