Correlation Between Changchun Engley and China Reform
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By analyzing existing cross correlation between Changchun Engley Automobile and China Reform Health, you can compare the effects of market volatilities on Changchun Engley and China Reform 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 Engley with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Engley and China Reform.
Diversification Opportunities for Changchun Engley and China Reform
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Engley Automobile and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Changchun Engley 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 Engley Automobile are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Changchun Engley i.e., Changchun Engley and China Reform go up and down completely randomly.
Pair Corralation between Changchun Engley and China Reform
Assuming the 90 days trading horizon Changchun Engley is expected to generate 13.61 times less return on investment than China Reform. But when comparing it to its historical volatility, Changchun Engley Automobile is 1.5 times less risky than China Reform. It trades about 0.01 of its potential returns per unit of risk. China Reform Health is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 673.00 in China Reform Health on October 18, 2024 and sell it today you would earn a total of 356.00 from holding China Reform Health or generate 52.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Engley Automobile vs. China Reform Health
Performance |
| Timeline |
| Changchun Engley Aut |
| China Reform Health |
Changchun Engley and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Engley and China Reform
The main advantage of trading using opposite Changchun Engley and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Engley position performs unexpectedly, China Reform 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 Reform will offset losses from the drop in China Reform's long position.| Changchun Engley vs. Southchip Semiconductor Technology | Changchun Engley vs. Semiconductor Manufacturing Intl | Changchun Engley vs. Jiugui Liquor Co | Changchun Engley vs. Youyou Foods Co |
| China Reform vs. Changchun Engley Automobile | China Reform vs. Haima Automobile Group | China Reform vs. Chengtun Mining Group | China Reform vs. Jiangsu Xinri E Vehicle |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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