Correlation Between Industrial and Changchun
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By analyzing existing cross correlation between Industrial and Commercial and Changchun UP Optotech, you can compare the effects of market volatilities on Industrial and Changchun 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 Industrial with a short position of Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Changchun.
Diversification Opportunities for Industrial and Changchun
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Industrial and Changchun is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech and Industrial 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 Industrial and Commercial are associated (or correlated) with Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Industrial i.e., Industrial and Changchun go up and down completely randomly.
Pair Corralation between Industrial and Changchun
Assuming the 90 days trading horizon Industrial is expected to generate 1.43 times less return on investment than Changchun. But when comparing it to its historical volatility, Industrial and Commercial is 2.81 times less risky than Changchun. It trades about 0.09 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,598 in Changchun UP Optotech on November 27, 2024 and sell it today you would earn a total of 1,677 from holding Changchun UP Optotech or generate 64.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Changchun UP Optotech
Performance |
| Timeline |
| Industrial and Commercial |
| Changchun UP Optotech |
Industrial and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Changchun
The main advantage of trading using opposite Industrial and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.| Industrial vs. Zhengzhou Coal Mining | Industrial vs. Tibet Huayu Mining | Industrial vs. Dhc Software Co | Industrial vs. Linewell Software Co |
| Changchun vs. Xiamen Insight Investment | Changchun vs. Zhejiang Construction Investment | Changchun vs. Beijing Jiaman Dress | Changchun vs. Air China Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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