Correlation Between Changchun Faway and Hunan Nanling
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By analyzing existing cross correlation between Changchun Faway Automobile and Hunan Nanling Industrial, you can compare the effects of market volatilities on Changchun Faway and Hunan Nanling 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 Hunan Nanling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Hunan Nanling.
Diversification Opportunities for Changchun Faway and Hunan Nanling
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Hunan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Hunan Nanling Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Nanling Industrial 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 Hunan Nanling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Nanling Industrial has no effect on the direction of Changchun Faway i.e., Changchun Faway and Hunan Nanling go up and down completely randomly.
Pair Corralation between Changchun Faway and Hunan Nanling
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 1.03 times more return on investment than Hunan Nanling. However, Changchun Faway is 1.03 times more volatile than Hunan Nanling Industrial. It trades about 0.05 of its potential returns per unit of risk. Hunan Nanling Industrial is currently generating about -0.16 per unit of risk. If you would invest 951.00 in Changchun Faway Automobile on August 28, 2024 and sell it today you would earn a total of 17.00 from holding Changchun Faway Automobile or generate 1.79% 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. Hunan Nanling Industrial
Performance |
| Timeline |
| Changchun Faway Auto |
| Hunan Nanling Industrial |
Changchun Faway and Hunan Nanling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Hunan Nanling
The main advantage of trading using opposite Changchun Faway and Hunan Nanling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Hunan Nanling 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 Hunan Nanling will offset losses from the drop in Hunan Nanling's long position.| Changchun Faway vs. Chinese Universe Publishing | Changchun Faway vs. Ningbo Jianan Electronics | Changchun Faway vs. Epoxy Base Electronic | Changchun Faway vs. Changjiang Publishing Media |
| Hunan Nanling vs. Bomin Electronics Co | Hunan Nanling vs. Aurora Optoelectronics Co | Hunan Nanling vs. TongFu Microelectronics Co | Hunan Nanling vs. Wuhan Yangtze Communication |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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