Correlation Between Changchun Faway and Hi Trend
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By analyzing existing cross correlation between Changchun Faway Automobile and Hi Trend TechCo, you can compare the effects of market volatilities on Changchun Faway and Hi Trend 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 Hi Trend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Hi Trend.
Diversification Opportunities for Changchun Faway and Hi Trend
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and 688391 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Hi Trend TechCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Trend TechCo 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 Hi Trend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Trend TechCo has no effect on the direction of Changchun Faway i.e., Changchun Faway and Hi Trend go up and down completely randomly.
Pair Corralation between Changchun Faway and Hi Trend
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.68 times more return on investment than Hi Trend. However, Changchun Faway Automobile is 1.47 times less risky than Hi Trend. It trades about 0.02 of its potential returns per unit of risk. Hi Trend TechCo is currently generating about -0.02 per unit of risk. If you would invest 895.00 in Changchun Faway Automobile on August 24, 2024 and sell it today you would earn a total of 80.00 from holding Changchun Faway Automobile or generate 8.94% 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. Hi Trend TechCo
Performance |
| Timeline |
| Changchun Faway Auto |
| Hi Trend TechCo |
Changchun Faway and Hi Trend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Hi Trend
The main advantage of trading using opposite Changchun Faway and Hi Trend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Hi Trend 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 Hi Trend will offset losses from the drop in Hi Trend's long position.| Changchun Faway vs. Shenzhen Zhongzhuang Construction | Changchun Faway vs. Kuangda Technology Group | Changchun Faway vs. Glodon Software Co | Changchun Faway vs. Hubei Forbon Technology |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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