Correlation Between Changchun Faway and Kunshan Guoli
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By analyzing existing cross correlation between Changchun Faway Automobile and Kunshan Guoli Electronic, you can compare the effects of market volatilities on Changchun Faway and Kunshan Guoli 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 Kunshan Guoli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Kunshan Guoli.
Diversification Opportunities for Changchun Faway and Kunshan Guoli
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Kunshan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Kunshan Guoli Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunshan Guoli Electronic 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 Kunshan Guoli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunshan Guoli Electronic has no effect on the direction of Changchun Faway i.e., Changchun Faway and Kunshan Guoli go up and down completely randomly.
Pair Corralation between Changchun Faway and Kunshan Guoli
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.6 times more return on investment than Kunshan Guoli. However, Changchun Faway Automobile is 1.66 times less risky than Kunshan Guoli. It trades about 0.02 of its potential returns per unit of risk. Kunshan Guoli Electronic is currently generating about -0.01 per unit of risk. If you would invest 837.00 in Changchun Faway Automobile on August 31, 2024 and sell it today you would earn a total of 96.00 from holding Changchun Faway Automobile or generate 11.47% 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. Kunshan Guoli Electronic
Performance |
| Timeline |
| Changchun Faway Auto |
| Kunshan Guoli Electronic |
Changchun Faway and Kunshan Guoli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Kunshan Guoli
The main advantage of trading using opposite Changchun Faway and Kunshan Guoli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Kunshan Guoli 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 Kunshan Guoli will offset losses from the drop in Kunshan Guoli's long position.| Changchun Faway vs. Tieling Newcity Investment | Changchun Faway vs. Markor International Home | Changchun Faway vs. Cultural Investment Holdings | Changchun Faway vs. Suofeiya Home Collection |
| Kunshan Guoli vs. Xingguang Agricultural Mach | Kunshan Guoli vs. Henzhen Zhaowei Machinery | Kunshan Guoli vs. Guizhou Chanhen Chemical | Kunshan Guoli vs. Sinomach General Machinery |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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