Correlation Between Chahua Modern and Chongqing Changan
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By analyzing existing cross correlation between Chahua Modern Housewares and Chongqing Changan Automobile, you can compare the effects of market volatilities on Chahua Modern 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 Chahua Modern with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and Chongqing Changan.
Diversification Opportunities for Chahua Modern and Chongqing Changan
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chahua and Chongqing is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Chahua Modern 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 Chahua Modern Housewares 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 Chahua Modern i.e., Chahua Modern and Chongqing Changan go up and down completely randomly.
Pair Corralation between Chahua Modern and Chongqing Changan
Assuming the 90 days trading horizon Chahua Modern Housewares is expected to generate 2.51 times more return on investment than Chongqing Changan. However, Chahua Modern is 2.51 times more volatile than Chongqing Changan Automobile. It trades about 0.07 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about -0.3 per unit of risk. If you would invest 2,000 in Chahua Modern Housewares on October 11, 2024 and sell it today you would earn a total of 88.00 from holding Chahua Modern Housewares or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chahua Modern Housewares vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Chahua Modern Housewares |
| Chongqing Changan |
Chahua Modern and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chahua Modern and Chongqing Changan
The main advantage of trading using opposite Chahua Modern and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern 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.| Chahua Modern vs. Ye Chiu Metal | Chahua Modern vs. Northern United Publishing | Chahua Modern vs. Dalian Thermal Power | Chahua Modern vs. Southern PublishingMedia Co |
| Chongqing Changan vs. Elite Color Environmental | Chongqing Changan vs. Marssenger Kitchenware Co | Chongqing Changan vs. Penyao Environmental Protection | Chongqing Changan vs. Anhui Deli Household |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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