Correlation Between Changshu Tongrun and Leaguer Shenzhen
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By analyzing existing cross correlation between Changshu Tongrun Auto and Leaguer Shenzhen MicroElectronics, you can compare the effects of market volatilities on Changshu Tongrun and Leaguer Shenzhen 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 Leaguer Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Leaguer Shenzhen.
Diversification Opportunities for Changshu Tongrun and Leaguer Shenzhen
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changshu and Leaguer is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and Leaguer Shenzhen MicroElectron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaguer Shenzhen Mic 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 Leaguer Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaguer Shenzhen Mic has no effect on the direction of Changshu Tongrun i.e., Changshu Tongrun and Leaguer Shenzhen go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Leaguer Shenzhen
Assuming the 90 days trading horizon Changshu Tongrun Auto is expected to generate 1.27 times more return on investment than Leaguer Shenzhen. However, Changshu Tongrun is 1.27 times more volatile than Leaguer Shenzhen MicroElectronics. It trades about 0.06 of its potential returns per unit of risk. Leaguer Shenzhen MicroElectronics is currently generating about -0.09 per unit of risk. If you would invest 1,744 in Changshu Tongrun Auto on August 27, 2024 and sell it today you would earn a total of 69.00 from holding Changshu Tongrun Auto or generate 3.96% 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. Leaguer Shenzhen MicroElectron
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Leaguer Shenzhen Mic |
Changshu Tongrun and Leaguer Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Leaguer Shenzhen
The main advantage of trading using opposite Changshu Tongrun and Leaguer Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun position performs unexpectedly, Leaguer Shenzhen 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 Leaguer Shenzhen will offset losses from the drop in Leaguer Shenzhen's long position.| Changshu Tongrun vs. Loongson Technology Corp | Changshu Tongrun vs. Chongqing Road Bridge | Changshu Tongrun vs. Shenzhen Fortune Trend | Changshu Tongrun vs. Wuhan Xianglong Power |
| Leaguer Shenzhen vs. Lutian Machinery Co | Leaguer Shenzhen vs. China Longyuan Power | Leaguer Shenzhen vs. Changshu Tongrun Auto | Leaguer Shenzhen vs. PetroChina Co Ltd |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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