Correlation Between Chongqing Brewery and National Silicon
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By analyzing existing cross correlation between Chongqing Brewery Co and National Silicon Industry, you can compare the effects of market volatilities on Chongqing Brewery and National Silicon 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 National Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and National Silicon.
Diversification Opportunities for Chongqing Brewery and National Silicon
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and National is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and National Silicon Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Silicon Industry 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 National Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Silicon Industry has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and National Silicon go up and down completely randomly.
Pair Corralation between Chongqing Brewery and National Silicon
Assuming the 90 days trading horizon Chongqing Brewery is expected to generate 3.21 times less return on investment than National Silicon. But when comparing it to its historical volatility, Chongqing Brewery Co is 1.76 times less risky than National Silicon. It trades about 0.05 of its potential returns per unit of risk. National Silicon Industry is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,496 in National Silicon Industry on September 19, 2024 and sell it today you would earn a total of 587.00 from holding National Silicon Industry or generate 39.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. National Silicon Industry
Performance |
| Timeline |
| Chongqing Brewery |
| National Silicon Industry |
Chongqing Brewery and National Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and National Silicon
The main advantage of trading using opposite Chongqing Brewery and National Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, National Silicon 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 National Silicon will offset losses from the drop in National Silicon's long position.| Chongqing Brewery vs. Industrial and Commercial | Chongqing Brewery vs. Kweichow Moutai Co | Chongqing Brewery vs. Agricultural Bank of | Chongqing Brewery vs. China Mobile Limited |
| National Silicon vs. Holitech Technology Co | National Silicon vs. Chongqing Brewery Co | National Silicon vs. Spring Airlines Co | National Silicon vs. Guangzhou Zhujiang Brewery |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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