Correlation Between Changchun Faway and Centre Testing
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By analyzing existing cross correlation between Changchun Faway Automobile and Centre Testing Intl, you can compare the effects of market volatilities on Changchun Faway and Centre Testing 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 Centre Testing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Centre Testing.
Diversification Opportunities for Changchun Faway and Centre Testing
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Centre is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Centre Testing Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centre Testing Intl 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 Centre Testing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centre Testing Intl has no effect on the direction of Changchun Faway i.e., Changchun Faway and Centre Testing go up and down completely randomly.
Pair Corralation between Changchun Faway and Centre Testing
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 1.25 times more return on investment than Centre Testing. However, Changchun Faway is 1.25 times more volatile than Centre Testing Intl. It trades about 0.01 of its potential returns per unit of risk. Centre Testing Intl is currently generating about -0.31 per unit of risk. If you would invest 948.00 in Changchun Faway Automobile on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Changchun Faway Automobile or generate 0.11% 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. Centre Testing Intl
Performance |
| Timeline |
| Changchun Faway Auto |
| Centre Testing Intl |
Changchun Faway and Centre Testing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Centre Testing
The main advantage of trading using opposite Changchun Faway and Centre Testing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Centre Testing 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 Centre Testing will offset losses from the drop in Centre Testing's long position.| Changchun Faway vs. Lutian Machinery Co | Changchun Faway vs. PetroChina Co Ltd | Changchun Faway vs. Bank of China | Changchun Faway vs. Gansu Jiu Steel |
| Centre Testing vs. Easyhome New Retail | Centre Testing vs. Tongling Nonferrous Metals | Centre Testing vs. CITIC Metal Co | Centre Testing vs. Shanghai Shuixing Home |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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