Correlation Between Sichuan Furong and Chongqing Shunbo
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By analyzing existing cross correlation between Sichuan Furong Technology and Chongqing Shunbo Aluminum, you can compare the effects of market volatilities on Sichuan Furong and Chongqing Shunbo 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 Furong with a short position of Chongqing Shunbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Furong and Chongqing Shunbo.
Diversification Opportunities for Sichuan Furong and Chongqing Shunbo
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sichuan and Chongqing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Furong Technology and Chongqing Shunbo Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Shunbo Aluminum and Sichuan Furong 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 Furong Technology are associated (or correlated) with Chongqing Shunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Shunbo Aluminum has no effect on the direction of Sichuan Furong i.e., Sichuan Furong and Chongqing Shunbo go up and down completely randomly.
Pair Corralation between Sichuan Furong and Chongqing Shunbo
Assuming the 90 days trading horizon Sichuan Furong Technology is expected to generate 18.81 times more return on investment than Chongqing Shunbo. However, Sichuan Furong is 18.81 times more volatile than Chongqing Shunbo Aluminum. It trades about 0.04 of its potential returns per unit of risk. Chongqing Shunbo Aluminum is currently generating about -0.03 per unit of risk. If you would invest 1,202 in Sichuan Furong Technology on October 16, 2024 and sell it today you would lose (70.00) from holding Sichuan Furong Technology or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Furong Technology vs. Chongqing Shunbo Aluminum
Performance |
| Timeline |
| Sichuan Furong Technology |
| Chongqing Shunbo Aluminum |
Sichuan Furong and Chongqing Shunbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Furong and Chongqing Shunbo
The main advantage of trading using opposite Sichuan Furong and Chongqing Shunbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Furong position performs unexpectedly, Chongqing Shunbo 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 Chongqing Shunbo will offset losses from the drop in Chongqing Shunbo's long position.| Sichuan Furong vs. Allgens Medical Technology | Sichuan Furong vs. Kontour Medical Technology | Sichuan Furong vs. Jinhe Biotechnology Co | Sichuan Furong vs. Liaoning Chengda Biotechnology |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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