Correlation Between Chongqing Brewery and Cambricon Technologies
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By analyzing existing cross correlation between Chongqing Brewery Co and Cambricon Technologies Corp, you can compare the effects of market volatilities on Chongqing Brewery and Cambricon Technologies 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 Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Cambricon Technologies.
Diversification Opportunities for Chongqing Brewery and Cambricon Technologies
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Cambricon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies 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 Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Cambricon Technologies
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to under-perform the Cambricon Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Brewery Co is 2.28 times less risky than Cambricon Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Cambricon Technologies Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,714 in Cambricon Technologies Corp on September 14, 2024 and sell it today you would earn a total of 51,985 from holding Cambricon Technologies Corp or generate 909.78% 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. Cambricon Technologies Corp
Performance |
| Timeline |
| Chongqing Brewery |
| Cambricon Technologies |
Chongqing Brewery and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Cambricon Technologies
The main advantage of trading using opposite Chongqing Brewery and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.| Chongqing Brewery vs. Jiaozuo Wanfang Aluminum | Chongqing Brewery vs. Keeson Technology Corp | Chongqing Brewery vs. Iat Automobile Technology | Chongqing Brewery vs. Holitech Technology 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 CEOs Directory module to screen CEOs from public companies around the world.
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