Correlation Between Epoxy Base and Chongqing Brewery
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By analyzing existing cross correlation between Epoxy Base Electronic and Chongqing Brewery Co, you can compare the effects of market volatilities on Epoxy Base and Chongqing Brewery 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 Epoxy Base with a short position of Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epoxy Base and Chongqing Brewery.
Diversification Opportunities for Epoxy Base and Chongqing Brewery
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Epoxy and Chongqing is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Epoxy Base Electronic and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery and Epoxy Base 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 Epoxy Base Electronic are associated (or correlated) with Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Epoxy Base i.e., Epoxy Base and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Epoxy Base and Chongqing Brewery
Assuming the 90 days trading horizon Epoxy Base Electronic is expected to generate 3.45 times more return on investment than Chongqing Brewery. However, Epoxy Base is 3.45 times more volatile than Chongqing Brewery Co. It trades about 0.11 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.16 per unit of risk. If you would invest 570.00 in Epoxy Base Electronic on September 13, 2024 and sell it today you would earn a total of 66.00 from holding Epoxy Base Electronic or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Epoxy Base Electronic vs. Chongqing Brewery Co
Performance |
| Timeline |
| Epoxy Base Electronic |
| Chongqing Brewery |
Epoxy Base and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epoxy Base and Chongqing Brewery
The main advantage of trading using opposite Epoxy Base and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epoxy Base position performs unexpectedly, Chongqing Brewery 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 Brewery will offset losses from the drop in Chongqing Brewery's long position.| Epoxy Base vs. Zijin Mining Group | Epoxy Base vs. Wanhua Chemical Group | Epoxy Base vs. Baoshan Iron Steel | Epoxy Base vs. Shandong Gold Mining |
| Chongqing Brewery vs. Jiaozuo Wanfang Aluminum | Chongqing Brewery vs. Keeson Technology Corp | Chongqing Brewery vs. Iat Automobile Technology | Chongqing Brewery vs. Holitech Technology 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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