Correlation Between Changchun Faway and Xiangyang Automobile
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By analyzing existing cross correlation between Changchun Faway Automobile and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Changchun Faway and Xiangyang Automobile 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 Changchun Faway with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Xiangyang Automobile.
Diversification Opportunities for Changchun Faway and Xiangyang Automobile
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Xiangyang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Changchun Faway 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 Changchun Faway Automobile are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Changchun Faway i.e., Changchun Faway and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Changchun Faway and Xiangyang Automobile
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.68 times more return on investment than Xiangyang Automobile. However, Changchun Faway Automobile is 1.48 times less risky than Xiangyang Automobile. It trades about -0.01 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about -0.01 per unit of risk. If you would invest 951.00 in Changchun Faway Automobile on August 28, 2024 and sell it today you would lose (11.00) from holding Changchun Faway Automobile or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Changchun Faway Auto |
| Xiangyang Automobile |
Changchun Faway and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Xiangyang Automobile
The main advantage of trading using opposite Changchun Faway and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.| Changchun Faway vs. Miracll Chemicals Co | Changchun Faway vs. Guangzhou KingTeller Technology | Changchun Faway vs. Nantong Jiangshan Agrochemical | Changchun Faway vs. Shanghai Jinfeng Wine |
| Xiangyang Automobile vs. Loongson Technology Corp | Xiangyang Automobile vs. Chongqing Road Bridge | Xiangyang Automobile vs. Shenzhen Fortune Trend | Xiangyang Automobile vs. Wuhan Xianglong Power |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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