Correlation Between Changshu Tongrun and Sunny Loan
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By analyzing existing cross correlation between Changshu Tongrun Auto and Sunny Loan Top, you can compare the effects of market volatilities on Changshu Tongrun and Sunny Loan 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 Sunny Loan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Sunny Loan.
Diversification Opportunities for Changshu Tongrun and Sunny Loan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changshu and Sunny is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and Sunny Loan Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Loan Top 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 Sunny Loan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Loan Top has no effect on the direction of Changshu Tongrun i.e., Changshu Tongrun and Sunny Loan go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Sunny Loan
Assuming the 90 days trading horizon Changshu Tongrun is expected to generate 2.2 times less return on investment than Sunny Loan. But when comparing it to its historical volatility, Changshu Tongrun Auto is 1.24 times less risky than Sunny Loan. It trades about 0.04 of its potential returns per unit of risk. Sunny Loan Top is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 579.00 in Sunny Loan Top on September 12, 2024 and sell it today you would earn a total of 573.00 from holding Sunny Loan Top or generate 98.96% 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. Sunny Loan Top
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Sunny Loan Top |
Changshu Tongrun and Sunny Loan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Sunny Loan
The main advantage of trading using opposite Changshu Tongrun and Sunny Loan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun position performs unexpectedly, Sunny Loan 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 Sunny Loan will offset losses from the drop in Sunny Loan's long position.| Changshu Tongrun vs. Kuang Chi Technologies | Changshu Tongrun vs. Shenzhen Noposion Agrochemicals | Changshu Tongrun vs. Yuan Longping High tech | Changshu Tongrun vs. Northking Information Technology |
| Sunny Loan vs. Lutian Machinery Co | Sunny Loan vs. PetroChina Co Ltd | Sunny Loan vs. Bank of China | Sunny Loan vs. Gansu Jiu Steel |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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