Correlation Between Changchun Faway and Tjk Machinery
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By analyzing existing cross correlation between Changchun Faway Automobile and Tjk Machinery Tianjin, you can compare the effects of market volatilities on Changchun Faway and Tjk Machinery 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 Tjk Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Tjk Machinery.
Diversification Opportunities for Changchun Faway and Tjk Machinery
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Tjk is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Tjk Machinery Tianjin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tjk Machinery Tianjin 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 Tjk Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tjk Machinery Tianjin has no effect on the direction of Changchun Faway i.e., Changchun Faway and Tjk Machinery go up and down completely randomly.
Pair Corralation between Changchun Faway and Tjk Machinery
Assuming the 90 days trading horizon Changchun Faway is expected to generate 2.71 times less return on investment than Tjk Machinery. But when comparing it to its historical volatility, Changchun Faway Automobile is 1.71 times less risky than Tjk Machinery. It trades about 0.02 of its potential returns per unit of risk. Tjk Machinery Tianjin is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,199 in Tjk Machinery Tianjin on August 25, 2024 and sell it today you would earn a total of 279.00 from holding Tjk Machinery Tianjin or generate 23.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Tjk Machinery Tianjin
Performance |
| Timeline |
| Changchun Faway Auto |
| Tjk Machinery Tianjin |
Changchun Faway and Tjk Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Tjk Machinery
The main advantage of trading using opposite Changchun Faway and Tjk Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Tjk Machinery 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 Tjk Machinery will offset losses from the drop in Tjk Machinery'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 |
| Tjk Machinery vs. Biwin Storage Technology | Tjk Machinery vs. PetroChina Co Ltd | Tjk Machinery vs. Industrial and Commercial | Tjk Machinery vs. China Construction Bank |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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