Correlation Between Jiangsu Financial and Chongqing Changan
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Chongqing Changan Automobile, you can compare the effects of market volatilities on Jiangsu Financial and Chongqing Changan 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 Jiangsu Financial with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Chongqing Changan.
Diversification Opportunities for Jiangsu Financial and Chongqing Changan
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Chongqing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Jiangsu Financial 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 Jiangsu Financial Leasing are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Jiangsu Financial i.e., Jiangsu Financial and Chongqing Changan go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Chongqing Changan
Assuming the 90 days trading horizon Jiangsu Financial Leasing is expected to under-perform the Chongqing Changan. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Financial Leasing is 1.78 times less risky than Chongqing Changan. The stock trades about -0.03 of its potential returns per unit of risk. The Chongqing Changan Automobile is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,430 in Chongqing Changan Automobile on September 5, 2024 and sell it today you would lose (27.00) from holding Chongqing Changan Automobile or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Jiangsu Financial Leasing |
| Chongqing Changan |
Jiangsu Financial and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Chongqing Changan
The main advantage of trading using opposite Jiangsu Financial and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial position performs unexpectedly, Chongqing Changan 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 Chongqing Changan will offset losses from the drop in Chongqing Changan's long position.| Jiangsu Financial vs. China Petroleum Chemical | Jiangsu Financial vs. PetroChina Co Ltd | Jiangsu Financial vs. China State Construction | Jiangsu Financial vs. China Railway Group |
| Chongqing Changan vs. Bloomage Biotechnology Corp | Chongqing Changan vs. Jiangsu Financial Leasing | Chongqing Changan vs. Hua Xia Bank | Chongqing Changan vs. Xiamen Bank 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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