Correlation Between Changchun Faway and Zhejiang Qianjiang
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By analyzing existing cross correlation between Changchun Faway Automobile and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Changchun Faway and Zhejiang Qianjiang 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 Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Zhejiang Qianjiang.
Diversification Opportunities for Changchun Faway and Zhejiang Qianjiang
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Zhejiang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang 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 Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Changchun Faway i.e., Changchun Faway and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Changchun Faway and Zhejiang Qianjiang
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.72 times more return on investment than Zhejiang Qianjiang. However, Changchun Faway Automobile is 1.39 times less risky than Zhejiang Qianjiang. It trades about 0.02 of its potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about 0.01 per unit of risk. If you would invest 860.00 in Changchun Faway Automobile on September 4, 2024 and sell it today you would earn a total of 95.00 from holding Changchun Faway Automobile or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Changchun Faway Auto |
| Zhejiang Qianjiang |
Changchun Faway and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Zhejiang Qianjiang
The main advantage of trading using opposite Changchun Faway and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| Changchun Faway vs. Cultural Investment Holdings | Changchun Faway vs. Gome Telecom Equipment | Changchun Faway vs. Bus Online Co | Changchun Faway vs. Holitech Technology Co |
| Zhejiang Qianjiang vs. Bank of China | Zhejiang Qianjiang vs. Kweichow Moutai Co | Zhejiang Qianjiang vs. PetroChina Co Ltd | Zhejiang Qianjiang vs. Bank of Communications |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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