Correlation Between Changchun Faway and Shanxi Xishan
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By analyzing existing cross correlation between Changchun Faway Automobile and Shanxi Xishan Coal, you can compare the effects of market volatilities on Changchun Faway and Shanxi Xishan 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 Shanxi Xishan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Shanxi Xishan.
Diversification Opportunities for Changchun Faway and Shanxi Xishan
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Changchun and Shanxi is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Shanxi Xishan Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Xishan Coal 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 Shanxi Xishan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Xishan Coal has no effect on the direction of Changchun Faway i.e., Changchun Faway and Shanxi Xishan go up and down completely randomly.
Pair Corralation between Changchun Faway and Shanxi Xishan
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 1.43 times more return on investment than Shanxi Xishan. However, Changchun Faway is 1.43 times more volatile than Shanxi Xishan Coal. It trades about 0.3 of its potential returns per unit of risk. Shanxi Xishan Coal is currently generating about -0.28 per unit of risk. If you would invest 860.00 in Changchun Faway Automobile on December 1, 2024 and sell it today you would earn a total of 56.00 from holding Changchun Faway Automobile or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Shanxi Xishan Coal
Performance |
| Timeline |
| Changchun Faway Auto |
| Shanxi Xishan Coal |
Changchun Faway and Shanxi Xishan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Shanxi Xishan
The main advantage of trading using opposite Changchun Faway and Shanxi Xishan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Shanxi Xishan 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 Shanxi Xishan will offset losses from the drop in Shanxi Xishan's long position.| Changchun Faway vs. Talkweb Information System | Changchun Faway vs. China Asset Management | Changchun Faway vs. Harvest Fund Management | Changchun Faway vs. Jinxiandai Information Industry |
| Shanxi Xishan vs. Anhui Xinhua Media | Shanxi Xishan vs. Konfoong Materials International | Shanxi Xishan vs. Ningbo Tip Rubber | Shanxi Xishan vs. NBTM New Materials |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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