Correlation Between Sichuan Changhong and China Everbright
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By analyzing existing cross correlation between Sichuan Changhong Electric and China Everbright Bank, you can compare the effects of market volatilities on Sichuan Changhong and China Everbright 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 Sichuan Changhong with a short position of China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Changhong and China Everbright.
Diversification Opportunities for Sichuan Changhong and China Everbright
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sichuan and China is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Changhong Electric and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank and Sichuan Changhong 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 Sichuan Changhong Electric are associated (or correlated) with China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of Sichuan Changhong i.e., Sichuan Changhong and China Everbright go up and down completely randomly.
Pair Corralation between Sichuan Changhong and China Everbright
Assuming the 90 days trading horizon Sichuan Changhong Electric is expected to generate 2.99 times more return on investment than China Everbright. However, Sichuan Changhong is 2.99 times more volatile than China Everbright Bank. It trades about 0.15 of its potential returns per unit of risk. China Everbright Bank is currently generating about 0.09 per unit of risk. If you would invest 437.00 in Sichuan Changhong Electric on October 18, 2024 and sell it today you would earn a total of 459.00 from holding Sichuan Changhong Electric or generate 105.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Changhong Electric vs. China Everbright Bank
Performance |
| Timeline |
| Sichuan Changhong |
| China Everbright Bank |
Sichuan Changhong and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Changhong and China Everbright
The main advantage of trading using opposite Sichuan Changhong and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Changhong position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| Sichuan Changhong vs. China Everbright Bank | Sichuan Changhong vs. Jiangsu Yueda Investment | Sichuan Changhong vs. Lecron Energy Saving | Sichuan Changhong vs. Henan Shuanghui Investment |
| China Everbright vs. Zhejiang Daily Media | China Everbright vs. Shuhua Sports Co | China Everbright vs. Hongrun Construction Group | China Everbright vs. Shenzhen AV Display 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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