Correlation Between Xiamen Bank and Chongqing Changan
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By analyzing existing cross correlation between Xiamen Bank Co and Chongqing Changan Automobile, you can compare the effects of market volatilities on Xiamen Bank 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 Xiamen Bank with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Bank and Chongqing Changan.
Diversification Opportunities for Xiamen Bank and Chongqing Changan
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Chongqing is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Bank Co and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Xiamen Bank 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 Xiamen Bank Co 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 Xiamen Bank i.e., Xiamen Bank and Chongqing Changan go up and down completely randomly.
Pair Corralation between Xiamen Bank and Chongqing Changan
Assuming the 90 days trading horizon Xiamen Bank Co is expected to generate 0.67 times more return on investment than Chongqing Changan. However, Xiamen Bank Co is 1.48 times less risky than Chongqing Changan. It trades about 0.2 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.01 per unit of risk. If you would invest 529.00 in Xiamen Bank Co on September 5, 2024 and sell it today you would earn a total of 47.00 from holding Xiamen Bank Co or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Bank Co vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Xiamen Bank |
| Chongqing Changan |
Xiamen Bank and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Bank and Chongqing Changan
The main advantage of trading using opposite Xiamen Bank and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Bank 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.| Xiamen Bank vs. Jiangsu Jinling Sports | Xiamen Bank vs. Everdisplay Optronics Shanghai | Xiamen Bank vs. Chengdu Spaceon Electronics | Xiamen Bank vs. CICC Fund Management |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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