Correlation Between Jinhui Liquor and Chongqing Changan
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By analyzing existing cross correlation between Jinhui Liquor Co and Chongqing Changan Automobile, you can compare the effects of market volatilities on Jinhui Liquor 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 Jinhui Liquor with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhui Liquor and Chongqing Changan.
Diversification Opportunities for Jinhui Liquor and Chongqing Changan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jinhui and Chongqing is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jinhui Liquor Co and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Jinhui Liquor 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 Jinhui Liquor Co 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 Jinhui Liquor i.e., Jinhui Liquor and Chongqing Changan go up and down completely randomly.
Pair Corralation between Jinhui Liquor and Chongqing Changan
Assuming the 90 days trading horizon Jinhui Liquor Co is expected to under-perform the Chongqing Changan. But the stock apears to be less risky and, when comparing its historical volatility, Jinhui Liquor Co is 1.2 times less risky than Chongqing Changan. The stock trades about -0.01 of its potential returns per unit of risk. The Chongqing Changan Automobile is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,272 in Chongqing Changan Automobile on September 4, 2024 and sell it today you would earn a total of 152.00 from holding Chongqing Changan Automobile or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhui Liquor Co vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Jinhui Liquor |
| Chongqing Changan |
Jinhui Liquor and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhui Liquor and Chongqing Changan
The main advantage of trading using opposite Jinhui Liquor and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhui Liquor 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.| Jinhui Liquor vs. Industrial and Commercial | Jinhui Liquor vs. Agricultural Bank of | Jinhui Liquor vs. China Construction Bank | Jinhui Liquor vs. Bank of China |
| Chongqing Changan vs. Industrial and Commercial | Chongqing Changan vs. China Construction Bank | Chongqing Changan vs. Agricultural Bank of | Chongqing Changan vs. Bank of China |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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