Correlation Between Zhongtong Guomai and Chongqing Changan
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Chongqing Changan Automobile, you can compare the effects of market volatilities on Zhongtong Guomai and Chongqing Changan 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 Zhongtong Guomai with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Chongqing Changan.
Diversification Opportunities for Zhongtong Guomai and Chongqing Changan
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongtong and Chongqing is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and Chongqing Changan go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Chongqing Changan
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to generate 1.37 times more return on investment than Chongqing Changan. However, Zhongtong Guomai is 1.37 times more volatile than Chongqing Changan Automobile. It trades about 0.09 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.07 per unit of risk. If you would invest 1,048 in Zhongtong Guomai Communication on September 1, 2024 and sell it today you would earn a total of 73.00 from holding Zhongtong Guomai Communication or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Chongqing Changan |
Zhongtong Guomai and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Chongqing Changan
The main advantage of trading using opposite Zhongtong Guomai and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, Chongqing Changan 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 Changan will offset losses from the drop in Chongqing Changan's long position.| Zhongtong Guomai vs. Chengdu B ray Media | Zhongtong Guomai vs. Mango Excellent Media | Zhongtong Guomai vs. Focus Media Information | Zhongtong Guomai vs. JiShi Media Co |
| Chongqing Changan vs. Biwin Storage Technology | Chongqing Changan vs. PetroChina Co Ltd | Chongqing Changan vs. Industrial and Commercial | Chongqing Changan vs. China Construction Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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