Correlation Between Yangmei Chemical and Chongqing Road
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By analyzing existing cross correlation between Yangmei Chemical Co and Chongqing Road Bridge, you can compare the effects of market volatilities on Yangmei Chemical and Chongqing Road 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 Yangmei Chemical with a short position of Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yangmei Chemical and Chongqing Road.
Diversification Opportunities for Yangmei Chemical and Chongqing Road
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yangmei and Chongqing is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Yangmei Chemical Co and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge and Yangmei Chemical 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 Yangmei Chemical Co are associated (or correlated) with Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Yangmei Chemical i.e., Yangmei Chemical and Chongqing Road go up and down completely randomly.
Pair Corralation between Yangmei Chemical and Chongqing Road
Assuming the 90 days trading horizon Yangmei Chemical Co is expected to under-perform the Chongqing Road. But the stock apears to be less risky and, when comparing its historical volatility, Yangmei Chemical Co is 1.14 times less risky than Chongqing Road. The stock trades about 0.0 of its potential returns per unit of risk. The Chongqing Road Bridge is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Chongqing Road Bridge on October 22, 2024 and sell it today you would lose (11.00) from holding Chongqing Road Bridge or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yangmei Chemical Co vs. Chongqing Road Bridge
Performance |
| Timeline |
| Yangmei Chemical |
| Chongqing Road Bridge |
Yangmei Chemical and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yangmei Chemical and Chongqing Road
The main advantage of trading using opposite Yangmei Chemical and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yangmei Chemical position performs unexpectedly, Chongqing Road 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 Road will offset losses from the drop in Chongqing Road's long position.| Yangmei Chemical vs. Mengtian Home Group | Yangmei Chemical vs. Ningbo MedicalSystem Biotechnology | Yangmei Chemical vs. Bloomage Biotechnology Corp | Yangmei Chemical vs. UE Furniture Co |
| Chongqing Road vs. Jinsanjiang Silicon Material | Chongqing Road vs. Longxing Chemical Stock | Chongqing Road vs. Yangmei Chemical Co | Chongqing Road vs. Hoshine Silicon Ind |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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