Correlation Between Chongqing Sokon and Chengdu Kanghua
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By analyzing existing cross correlation between Chongqing Sokon Ind and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Chongqing Sokon and Chengdu Kanghua 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 Chongqing Sokon with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Sokon and Chengdu Kanghua.
Diversification Opportunities for Chongqing Sokon and Chengdu Kanghua
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chongqing and Chengdu is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Sokon Ind and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and Chongqing Sokon 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 Chongqing Sokon Ind are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Chongqing Sokon i.e., Chongqing Sokon and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Chongqing Sokon and Chengdu Kanghua
Assuming the 90 days trading horizon Chongqing Sokon Ind is expected to generate 1.4 times more return on investment than Chengdu Kanghua. However, Chongqing Sokon is 1.4 times more volatile than Chengdu Kanghua Biological. It trades about 0.02 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.31 per unit of risk. If you would invest 13,134 in Chongqing Sokon Ind on October 25, 2024 and sell it today you would earn a total of 56.00 from holding Chongqing Sokon Ind or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Sokon Ind vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Chongqing Sokon Ind |
| Chengdu Kanghua Biol |
Chongqing Sokon and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Sokon and Chengdu Kanghua
The main advantage of trading using opposite Chongqing Sokon and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Sokon position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Chongqing Sokon vs. Shandong Iron and | Chongqing Sokon vs. Central Plains Environment | Chongqing Sokon vs. Changjiang Jinggong Steel | Chongqing Sokon vs. Eit Environmental Development |
| Chengdu Kanghua vs. Tongding Interconnection Information | Chengdu Kanghua vs. Invengo Information Technology | Chengdu Kanghua vs. Spring Airlines Co | Chengdu Kanghua vs. Hygon Information Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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