Correlation Between Sichuan Teway and Changshu Tongrun
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By analyzing existing cross correlation between Sichuan Teway Food and Changshu Tongrun Auto, you can compare the effects of market volatilities on Sichuan Teway and Changshu Tongrun 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 Sichuan Teway with a short position of Changshu Tongrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Teway and Changshu Tongrun.
Diversification Opportunities for Sichuan Teway and Changshu Tongrun
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sichuan and Changshu is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Teway Food and Changshu Tongrun Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Tongrun Auto and Sichuan Teway 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 Sichuan Teway Food are associated (or correlated) with Changshu Tongrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Tongrun Auto has no effect on the direction of Sichuan Teway i.e., Sichuan Teway and Changshu Tongrun go up and down completely randomly.
Pair Corralation between Sichuan Teway and Changshu Tongrun
Assuming the 90 days trading horizon Sichuan Teway Food is expected to generate 0.91 times more return on investment than Changshu Tongrun. However, Sichuan Teway Food is 1.1 times less risky than Changshu Tongrun. It trades about 0.01 of its potential returns per unit of risk. Changshu Tongrun Auto is currently generating about -0.01 per unit of risk. If you would invest 1,368 in Sichuan Teway Food on August 25, 2024 and sell it today you would lose (33.00) from holding Sichuan Teway Food or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Teway Food vs. Changshu Tongrun Auto
Performance |
| Timeline |
| Sichuan Teway Food |
| Changshu Tongrun Auto |
Sichuan Teway and Changshu Tongrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Teway and Changshu Tongrun
The main advantage of trading using opposite Sichuan Teway and Changshu Tongrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Teway position performs unexpectedly, Changshu Tongrun 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 Changshu Tongrun will offset losses from the drop in Changshu Tongrun's long position.| Sichuan Teway vs. China Petroleum Chemical | Sichuan Teway vs. PetroChina Co Ltd | Sichuan Teway vs. China State Construction | Sichuan Teway vs. China Railway Group |
| Changshu Tongrun vs. Sichuan Teway Food | Changshu Tongrun vs. Beijing Sanyuan Foods | Changshu Tongrun vs. Jiajia Food Group | Changshu Tongrun vs. Bus Online Co |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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