Correlation Between Changchun Faway and Industrial Securities
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By analyzing existing cross correlation between Changchun Faway Automobile and Industrial Securities Co, you can compare the effects of market volatilities on Changchun Faway and Industrial Securities 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 Industrial Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Industrial Securities.
Diversification Opportunities for Changchun Faway and Industrial Securities
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Industrial is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Industrial Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Securities 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 Industrial Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Securities has no effect on the direction of Changchun Faway i.e., Changchun Faway and Industrial Securities go up and down completely randomly.
Pair Corralation between Changchun Faway and Industrial Securities
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 1.2 times more return on investment than Industrial Securities. However, Changchun Faway is 1.2 times more volatile than Industrial Securities Co. It trades about 0.02 of its potential returns per unit of risk. Industrial Securities Co 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 96.00 from holding Changchun Faway Automobile or generate 11.18% 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. Industrial Securities Co
Performance |
| Timeline |
| Changchun Faway Auto |
| Industrial Securities |
Changchun Faway and Industrial Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Industrial Securities
The main advantage of trading using opposite Changchun Faway and Industrial Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Industrial Securities 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 Industrial Securities will offset losses from the drop in Industrial Securities' 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 |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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