Correlation Between Hainan Haiqi and Chongqing Changan
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Chongqing Changan Automobile, you can compare the effects of market volatilities on Hainan Haiqi 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 Hainan Haiqi with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Chongqing Changan.
Diversification Opportunities for Hainan Haiqi and Chongqing Changan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Chongqing is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Hainan Haiqi 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 Hainan Haiqi Transportation 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 Hainan Haiqi i.e., Hainan Haiqi and Chongqing Changan go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Chongqing Changan
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to under-perform the Chongqing Changan. In addition to that, Hainan Haiqi is 1.06 times more volatile than Chongqing Changan Automobile. It trades about -0.01 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 1,254 in Chongqing Changan Automobile on September 14, 2024 and sell it today you would earn a total of 208.00 from holding Chongqing Changan Automobile or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Haiqi Transportation vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Hainan Haiqi Transpo |
| Chongqing Changan |
Hainan Haiqi and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Chongqing Changan
The main advantage of trading using opposite Hainan Haiqi and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi 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.| Hainan Haiqi vs. Ming Yang Smart | Hainan Haiqi vs. 159681 | Hainan Haiqi vs. 159005 | Hainan Haiqi vs. Loctek Ergonomic Technology |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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