Correlation Between Changchun Faway and BlueFocus Communication
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By analyzing existing cross correlation between Changchun Faway Automobile and BlueFocus Communication Group, you can compare the effects of market volatilities on Changchun Faway and BlueFocus Communication 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 BlueFocus Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and BlueFocus Communication.
Diversification Opportunities for Changchun Faway and BlueFocus Communication
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and BlueFocus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and BlueFocus Communication Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueFocus Communication 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 BlueFocus Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlueFocus Communication has no effect on the direction of Changchun Faway i.e., Changchun Faway and BlueFocus Communication go up and down completely randomly.
Pair Corralation between Changchun Faway and BlueFocus Communication
Assuming the 90 days trading horizon Changchun Faway is expected to generate 16.21 times less return on investment than BlueFocus Communication. But when comparing it to its historical volatility, Changchun Faway Automobile is 3.09 times less risky than BlueFocus Communication. It trades about 0.03 of its potential returns per unit of risk. BlueFocus Communication Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 954.00 in BlueFocus Communication Group on September 13, 2024 and sell it today you would earn a total of 199.00 from holding BlueFocus Communication Group or generate 20.86% 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. BlueFocus Communication Group
Performance |
| Timeline |
| Changchun Faway Auto |
| BlueFocus Communication |
Changchun Faway and BlueFocus Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and BlueFocus Communication
The main advantage of trading using opposite Changchun Faway and BlueFocus Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, BlueFocus Communication 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 BlueFocus Communication will offset losses from the drop in BlueFocus Communication's long position.| Changchun Faway vs. BeiGene | Changchun Faway vs. Kweichow Moutai Co | Changchun Faway vs. Beijing Roborock Technology | Changchun Faway vs. G bits Network Technology |
| BlueFocus Communication vs. BYD Co Ltd | BlueFocus Communication vs. China Mobile Limited | BlueFocus Communication vs. Agricultural Bank of | BlueFocus Communication vs. Industrial and Commercial |
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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