Correlation Between Changchun Faway and Zhongtong Guomai
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By analyzing existing cross correlation between Changchun Faway Automobile and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Changchun Faway and Zhongtong Guomai 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 Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Zhongtong Guomai.
Diversification Opportunities for Changchun Faway and Zhongtong Guomai
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Zhongtong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com 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 Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Changchun Faway i.e., Changchun Faway and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between Changchun Faway and Zhongtong Guomai
Assuming the 90 days trading horizon Changchun Faway is expected to generate 5.41 times less return on investment than Zhongtong Guomai. But when comparing it to its historical volatility, Changchun Faway Automobile is 1.37 times less risky than Zhongtong Guomai. It trades about 0.01 of its potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 774.00 in Zhongtong Guomai Communication on August 29, 2024 and sell it today you would earn a total of 289.00 from holding Zhongtong Guomai Communication or generate 37.34% 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. Zhongtong Guomai Communication
Performance |
| Timeline |
| Changchun Faway Auto |
| Zhongtong Guomai Com |
Changchun Faway and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Zhongtong Guomai
The main advantage of trading using opposite Changchun Faway and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Zhongtong Guomai 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 Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.| Changchun Faway vs. Agricultural Bank of | Changchun Faway vs. Industrial and Commercial | Changchun Faway vs. Bank of China | Changchun Faway vs. China Construction Bank |
| Zhongtong Guomai vs. Jilin Jlu Communication | Zhongtong Guomai vs. Miracll Chemicals Co | Zhongtong Guomai vs. Gome Telecom Equipment | Zhongtong Guomai vs. Soyea Technology Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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