Correlation Between Changchun Engley and Liaoning Dingjide
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By analyzing existing cross correlation between Changchun Engley Automobile and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Changchun Engley and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Engley and Liaoning Dingjide.
Diversification Opportunities for Changchun Engley and Liaoning Dingjide
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Changchun and Liaoning is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Engley Automobile and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Changchun Engley i.e., Changchun Engley and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Changchun Engley and Liaoning Dingjide
Assuming the 90 days trading horizon Changchun Engley Automobile is expected to generate 0.99 times more return on investment than Liaoning Dingjide. However, Changchun Engley Automobile is 1.01 times less risky than Liaoning Dingjide. It trades about -0.02 of its potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about -0.05 per unit of risk. If you would invest 547.00 in Changchun Engley Automobile on October 30, 2024 and sell it today you would lose (197.00) from holding Changchun Engley Automobile or give up 36.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Engley Automobile vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Changchun Engley Aut |
| Liaoning Dingjide |
Changchun Engley and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Engley and Liaoning Dingjide
The main advantage of trading using opposite Changchun Engley and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Engley position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| Changchun Engley vs. Guangdong Jingyi Metal | Changchun Engley vs. Guocheng Mining Co | Changchun Engley vs. China Publishing Media | Changchun Engley vs. Wasu Media Holding |
| Liaoning Dingjide vs. Tjk Machinery Tianjin | Liaoning Dingjide vs. Qijing Machinery | Liaoning Dingjide vs. Zhejiang Yongjin Metal | Liaoning Dingjide vs. CITIC Metal 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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