Correlation Between Chongqing Brewery and Shanghai Jinfeng
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By analyzing existing cross correlation between Chongqing Brewery Co and Shanghai Jinfeng Wine, you can compare the effects of market volatilities on Chongqing Brewery and Shanghai Jinfeng 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 Jinfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Shanghai Jinfeng.
Diversification Opportunities for Chongqing Brewery and Shanghai Jinfeng
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Shanghai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Shanghai Jinfeng Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Jinfeng Wine 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 Jinfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Jinfeng Wine has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Shanghai Jinfeng go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Shanghai Jinfeng
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to generate 0.86 times more return on investment than Shanghai Jinfeng. However, Chongqing Brewery Co is 1.17 times less risky than Shanghai Jinfeng. It trades about 0.02 of its potential returns per unit of risk. Shanghai Jinfeng Wine is currently generating about 0.02 per unit of risk. If you would invest 6,129 in Chongqing Brewery Co on September 12, 2024 and sell it today you would earn a total of 448.00 from holding Chongqing Brewery Co or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Shanghai Jinfeng Wine
Performance |
| Timeline |
| Chongqing Brewery |
| Shanghai Jinfeng Wine |
Chongqing Brewery and Shanghai Jinfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Shanghai Jinfeng
The main advantage of trading using opposite Chongqing Brewery and Shanghai Jinfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Shanghai Jinfeng 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 Jinfeng will offset losses from the drop in Shanghai Jinfeng'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 |
| Shanghai Jinfeng vs. China Petroleum Chemical | Shanghai Jinfeng vs. PetroChina Co Ltd | Shanghai Jinfeng vs. China State Construction | Shanghai Jinfeng vs. China Railway Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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