Correlation Between Changshu Tongrun and China Longyuan
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By analyzing existing cross correlation between Changshu Tongrun Auto and China Longyuan Power, you can compare the effects of market volatilities on Changshu Tongrun and China Longyuan 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 Changshu Tongrun with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and China Longyuan.
Diversification Opportunities for Changshu Tongrun and China Longyuan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changshu and China is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Changshu Tongrun 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 Changshu Tongrun Auto are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Changshu Tongrun i.e., Changshu Tongrun and China Longyuan go up and down completely randomly.
Pair Corralation between Changshu Tongrun and China Longyuan
Assuming the 90 days trading horizon Changshu Tongrun Auto is expected to generate 1.2 times more return on investment than China Longyuan. However, Changshu Tongrun is 1.2 times more volatile than China Longyuan Power. It trades about 0.14 of its potential returns per unit of risk. China Longyuan Power is currently generating about 0.08 per unit of risk. If you would invest 1,324 in Changshu Tongrun Auto on August 29, 2024 and sell it today you would earn a total of 409.00 from holding Changshu Tongrun Auto or generate 30.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changshu Tongrun Auto vs. China Longyuan Power
Performance |
| Timeline |
| Changshu Tongrun Auto |
| China Longyuan Power |
Changshu Tongrun and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and China Longyuan
The main advantage of trading using opposite Changshu Tongrun and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.| Changshu Tongrun vs. Changshu Tianyin Electromechan | Changshu Tongrun vs. Changshu Ruite Electric | Changshu Tongrun vs. Changshu Automotive Trim | Changshu Tongrun vs. Zhejiang Zanyu Technology |
| China Longyuan vs. Industrial and Commercial | China Longyuan vs. Agricultural Bank of | China Longyuan vs. China Construction Bank | China Longyuan vs. Bank of China |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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