Correlation Between Changchun Faway and Zhejiang Kingland
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By analyzing existing cross correlation between Changchun Faway Automobile and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on Changchun Faway and Zhejiang Kingland 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 Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Zhejiang Kingland.
Diversification Opportunities for Changchun Faway and Zhejiang Kingland
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Zhejiang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland 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 Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Changchun Faway i.e., Changchun Faway and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between Changchun Faway and Zhejiang Kingland
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 1.02 times more return on investment than Zhejiang Kingland. However, Changchun Faway is 1.02 times more volatile than Zhejiang Kingland Pipeline. It trades about 0.02 of its potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about 0.02 per unit of risk. If you would invest 859.00 in Changchun Faway Automobile on September 3, 2024 and sell it today you would earn a total of 84.00 from holding Changchun Faway Automobile or generate 9.78% 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. Zhejiang Kingland Pipeline
Performance |
| Timeline |
| Changchun Faway Auto |
| Zhejiang Kingland |
Changchun Faway and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Zhejiang Kingland
The main advantage of trading using opposite Changchun Faway and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Zhejiang Kingland 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 Kingland will offset losses from the drop in Zhejiang Kingland's long position.| Changchun Faway vs. PetroChina Co Ltd | Changchun Faway vs. China Mobile Limited | Changchun Faway vs. Industrial and Commercial | Changchun Faway vs. China Life Insurance |
| Zhejiang Kingland vs. Gansu Jiu Steel | Zhejiang Kingland vs. Ming Yang Smart | Zhejiang Kingland vs. Aba Chemicals Corp | Zhejiang Kingland vs. Loctek Ergonomic Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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