Correlation Between Chongqing Brewery and Xiamen Bank
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By analyzing existing cross correlation between Chongqing Brewery Co and Xiamen Bank Co, you can compare the effects of market volatilities on Chongqing Brewery and Xiamen Bank 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 Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Xiamen Bank.
Diversification Opportunities for Chongqing Brewery and Xiamen Bank
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chongqing and Xiamen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Bank 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Xiamen Bank go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Xiamen Bank
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to under-perform the Xiamen Bank. In addition to that, Chongqing Brewery is 1.2 times more volatile than Xiamen Bank Co. It trades about -0.31 of its total potential returns per unit of risk. Xiamen Bank Co is currently generating about 0.15 per unit of volatility. If you would invest 537.00 in Xiamen Bank Co on November 6, 2024 and sell it today you would earn a total of 18.00 from holding Xiamen Bank Co or generate 3.35% 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. Xiamen Bank Co
Performance |
| Timeline |
| Chongqing Brewery |
| Xiamen Bank |
Chongqing Brewery and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Xiamen Bank
The main advantage of trading using opposite Chongqing Brewery and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank's long position.| Chongqing Brewery vs. Bangyan Technology Co | Chongqing Brewery vs. Guangzhou KingTeller Technology | Chongqing Brewery vs. Strait Innovation Internet | Chongqing Brewery vs. Air China Ltd |
| Xiamen Bank vs. Guangzhou Restaurants Group | Xiamen Bank vs. Jinsanjiang Silicon Material | Xiamen Bank vs. GRG Banking Equipment | Xiamen Bank vs. Lianhe Chemical 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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