Correlation Between Changchun Faway and HeBei Jinniu
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By analyzing existing cross correlation between Changchun Faway Automobile and HeBei Jinniu Chemical, you can compare the effects of market volatilities on Changchun Faway and HeBei Jinniu 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 HeBei Jinniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and HeBei Jinniu.
Diversification Opportunities for Changchun Faway and HeBei Jinniu
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and HeBei is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and HeBei Jinniu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeBei Jinniu Chemical 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 HeBei Jinniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeBei Jinniu Chemical has no effect on the direction of Changchun Faway i.e., Changchun Faway and HeBei Jinniu go up and down completely randomly.
Pair Corralation between Changchun Faway and HeBei Jinniu
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to under-perform the HeBei Jinniu. But the stock apears to be less risky and, when comparing its historical volatility, Changchun Faway Automobile is 2.25 times less risky than HeBei Jinniu. The stock trades about -0.04 of its potential returns per unit of risk. The HeBei Jinniu Chemical is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 475.00 in HeBei Jinniu Chemical on September 14, 2024 and sell it today you would earn a total of 105.00 from holding HeBei Jinniu Chemical or generate 22.11% 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. HeBei Jinniu Chemical
Performance |
| Timeline |
| Changchun Faway Auto |
| HeBei Jinniu Chemical |
Changchun Faway and HeBei Jinniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and HeBei Jinniu
The main advantage of trading using opposite Changchun Faway and HeBei Jinniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, HeBei Jinniu 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 HeBei Jinniu will offset losses from the drop in HeBei Jinniu'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 |
| HeBei Jinniu vs. Zijin Mining Group | HeBei Jinniu vs. Wanhua Chemical Group | HeBei Jinniu vs. Baoshan Iron Steel | HeBei Jinniu vs. Shandong Gold Mining |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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