Correlation Between Hang Xiao and Chongqing Brewery
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By analyzing existing cross correlation between Hang Xiao Steel and Chongqing Brewery Co, you can compare the effects of market volatilities on Hang Xiao and Chongqing Brewery 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 Hang Xiao with a short position of Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Xiao and Chongqing Brewery.
Diversification Opportunities for Hang Xiao and Chongqing Brewery
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hang and Chongqing is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hang Xiao Steel and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery and Hang Xiao 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 Hang Xiao Steel are associated (or correlated) with Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Hang Xiao i.e., Hang Xiao and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Hang Xiao and Chongqing Brewery
Assuming the 90 days trading horizon Hang Xiao is expected to generate 10.51 times less return on investment than Chongqing Brewery. But when comparing it to its historical volatility, Hang Xiao Steel is 1.05 times less risky than Chongqing Brewery. It trades about 0.0 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. 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 |
Hang Xiao Steel vs. Chongqing Brewery Co
Performance |
| Timeline |
| Hang Xiao Steel |
| Chongqing Brewery |
Hang Xiao and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Xiao and Chongqing Brewery
The main advantage of trading using opposite Hang Xiao and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Xiao position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Hang Xiao vs. Agricultural Bank of | Hang Xiao vs. Industrial and Commercial | Hang Xiao vs. Bank of China | Hang Xiao vs. PetroChina Co Ltd |
| Chongqing Brewery vs. China Petroleum Chemical | Chongqing Brewery vs. PetroChina Co Ltd | Chongqing Brewery vs. China State Construction | Chongqing Brewery 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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