Correlation Between Dawning Information and Chongqing Changan
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By analyzing existing cross correlation between Dawning Information Industry and Chongqing Changan Automobile, you can compare the effects of market volatilities on Dawning Information 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 Dawning Information with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawning Information and Chongqing Changan.
Diversification Opportunities for Dawning Information and Chongqing Changan
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dawning and Chongqing is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dawning Information Industry and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Dawning Information 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 Dawning Information Industry 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 Dawning Information i.e., Dawning Information and Chongqing Changan go up and down completely randomly.
Pair Corralation between Dawning Information and Chongqing Changan
Assuming the 90 days trading horizon Dawning Information Industry is expected to generate 2.09 times more return on investment than Chongqing Changan. However, Dawning Information is 2.09 times more volatile than Chongqing Changan Automobile. It trades about 0.07 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.03 per unit of risk. If you would invest 3,285 in Dawning Information Industry on November 27, 2024 and sell it today you would earn a total of 4,444 from holding Dawning Information Industry or generate 135.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dawning Information Industry vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Dawning Information |
| Chongqing Changan |
Dawning Information and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dawning Information and Chongqing Changan
The main advantage of trading using opposite Dawning Information and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawning Information 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.| Dawning Information vs. StarPower Semiconductor | Dawning Information vs. Semiconductor Manufacturing Intl | Dawning Information vs. Cicc Fund Management | Dawning Information vs. Huizhou Speed Wireless |
| Chongqing Changan vs. Impulse Qingdao Health | Chongqing Changan vs. By health | Chongqing Changan vs. Anhui Huaren Health | Chongqing Changan vs. Ningbo Jintian Copper |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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