Correlation Between Changchun Engley and Chongqing Changan
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By analyzing existing cross correlation between Changchun Engley Automobile and Chongqing Changan Automobile, you can compare the effects of market volatilities on Changchun Engley 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 Changchun Engley with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Engley and Chongqing Changan.
Diversification Opportunities for Changchun Engley and Chongqing Changan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Chongqing is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Engley Automobile and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan 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 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 Changchun Engley i.e., Changchun Engley and Chongqing Changan go up and down completely randomly.
Pair Corralation between Changchun Engley and Chongqing Changan
Assuming the 90 days trading horizon Changchun Engley Automobile is expected to under-perform the Chongqing Changan. In addition to that, Changchun Engley is 1.08 times more volatile than Chongqing Changan Automobile. It trades about -0.05 of its total potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.03 per unit of volatility. If you would invest 1,849 in Chongqing Changan Automobile on September 2, 2024 and sell it today you would lose (468.00) from holding Chongqing Changan Automobile or give up 25.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Engley Automobile vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Changchun Engley Aut |
| Chongqing Changan |
Changchun Engley and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Engley and Chongqing Changan
The main advantage of trading using opposite Changchun Engley and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Engley 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.| Changchun Engley vs. BYD Co Ltd | Changchun Engley vs. China Mobile Limited | Changchun Engley vs. Agricultural Bank of | Changchun Engley vs. Industrial and Commercial |
| Chongqing Changan vs. Biwin Storage Technology | Chongqing Changan vs. PetroChina Co Ltd | Chongqing Changan vs. Industrial and Commercial | Chongqing Changan vs. China Construction Bank |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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