Correlation Between Changchun Faway and Arrow Home
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By analyzing existing cross correlation between Changchun Faway Automobile and Arrow Home Group, you can compare the effects of market volatilities on Changchun Faway and Arrow Home 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 Arrow Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Arrow Home.
Diversification Opportunities for Changchun Faway and Arrow Home
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Arrow is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Arrow Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Home Group 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 Arrow Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Home Group has no effect on the direction of Changchun Faway i.e., Changchun Faway and Arrow Home go up and down completely randomly.
Pair Corralation between Changchun Faway and Arrow Home
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.81 times more return on investment than Arrow Home. However, Changchun Faway Automobile is 1.24 times less risky than Arrow Home. It trades about 0.04 of its potential returns per unit of risk. Arrow Home Group is currently generating about -0.06 per unit of risk. If you would invest 783.00 in Changchun Faway Automobile on August 26, 2024 and sell it today you would earn a total of 192.00 from holding Changchun Faway Automobile or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Arrow Home Group
Performance |
| Timeline |
| Changchun Faway Auto |
| Arrow Home Group |
Changchun Faway and Arrow Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Arrow Home
The main advantage of trading using opposite Changchun Faway and Arrow Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Arrow Home 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 Arrow Home will offset losses from the drop in Arrow Home's long position.| Changchun Faway vs. Songz Automobile Air | Changchun Faway vs. Advanced Technology Materials | Changchun Faway vs. Sinomach Automobile Co | Changchun Faway vs. Ningxia Building Materials |
| Arrow Home vs. Zhongtong Guomai Communication | Arrow Home vs. Guangdong Shenglu Telecommunication | Arrow Home vs. HanS Laser Tech | Arrow Home vs. Changchun Faway Automobile |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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