Correlation Between Changshu Tongrun and Fuyao Glass
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By analyzing existing cross correlation between Changshu Tongrun Auto and Fuyao Glass Industry, you can compare the effects of market volatilities on Changshu Tongrun and Fuyao Glass 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 Fuyao Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Fuyao Glass.
Diversification Opportunities for Changshu Tongrun and Fuyao Glass
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Changshu and Fuyao is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and Fuyao Glass Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuyao Glass Industry 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 Fuyao Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuyao Glass Industry has no effect on the direction of Changshu Tongrun i.e., Changshu Tongrun and Fuyao Glass go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Fuyao Glass
Assuming the 90 days trading horizon Changshu Tongrun Auto is expected to generate 2.29 times more return on investment than Fuyao Glass. However, Changshu Tongrun is 2.29 times more volatile than Fuyao Glass Industry. It trades about 0.3 of its potential returns per unit of risk. Fuyao Glass Industry is currently generating about -0.25 per unit of risk. If you would invest 1,716 in Changshu Tongrun Auto on November 29, 2024 and sell it today you would earn a total of 204.00 from holding Changshu Tongrun Auto or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changshu Tongrun Auto vs. Fuyao Glass Industry
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Fuyao Glass Industry |
Changshu Tongrun and Fuyao Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Fuyao Glass
The main advantage of trading using opposite Changshu Tongrun and Fuyao Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun position performs unexpectedly, Fuyao Glass 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 Fuyao Glass will offset losses from the drop in Fuyao Glass' long position.| Changshu Tongrun vs. Beijing Kingsoft Office | Changshu Tongrun vs. Baoding Dongli Machinery | Changshu Tongrun vs. Huasi Agricultural Development | Changshu Tongrun vs. Ningbo Homelink Eco iTech |
| Fuyao Glass vs. Heilongjiang Transport Development | Fuyao Glass vs. Shuhua Sports Co | Fuyao Glass vs. Central China Land | Fuyao Glass vs. Changjiang Publishing Media |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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