Correlation Between Qijing Machinery and Chengdu Spaceon
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By analyzing existing cross correlation between Qijing Machinery and Chengdu Spaceon Electronics, you can compare the effects of market volatilities on Qijing Machinery and Chengdu Spaceon 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 Qijing Machinery with a short position of Chengdu Spaceon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qijing Machinery and Chengdu Spaceon.
Diversification Opportunities for Qijing Machinery and Chengdu Spaceon
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qijing and Chengdu is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Qijing Machinery and Chengdu Spaceon Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Spaceon Elec and Qijing Machinery 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 Qijing Machinery are associated (or correlated) with Chengdu Spaceon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Spaceon Elec has no effect on the direction of Qijing Machinery i.e., Qijing Machinery and Chengdu Spaceon go up and down completely randomly.
Pair Corralation between Qijing Machinery and Chengdu Spaceon
Assuming the 90 days trading horizon Qijing Machinery is expected to generate 2.09 times more return on investment than Chengdu Spaceon. However, Qijing Machinery is 2.09 times more volatile than Chengdu Spaceon Electronics. It trades about 0.18 of its potential returns per unit of risk. Chengdu Spaceon Electronics is currently generating about 0.09 per unit of risk. If you would invest 1,260 in Qijing Machinery on November 8, 2024 and sell it today you would earn a total of 118.00 from holding Qijing Machinery or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qijing Machinery vs. Chengdu Spaceon Electronics
Performance |
| Timeline |
| Qijing Machinery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chengdu Spaceon Elec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Qijing Machinery and Chengdu Spaceon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qijing Machinery and Chengdu Spaceon
The main advantage of trading using opposite Qijing Machinery and Chengdu Spaceon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qijing Machinery position performs unexpectedly, Chengdu Spaceon 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 Chengdu Spaceon will offset losses from the drop in Chengdu Spaceon's long position.The idea behind Qijing Machinery and Chengdu Spaceon Electronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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