Correlation Between Touchstone International and Chongqing Changan
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By analyzing existing cross correlation between Touchstone International Medical and Chongqing Changan Automobile, you can compare the effects of market volatilities on Touchstone International 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 Touchstone International with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and Chongqing Changan.
Diversification Opportunities for Touchstone International and Chongqing Changan
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Touchstone and Chongqing is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Medic and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Touchstone International 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 Touchstone International Medical 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 Touchstone International i.e., Touchstone International and Chongqing Changan go up and down completely randomly.
Pair Corralation between Touchstone International and Chongqing Changan
Assuming the 90 days trading horizon Touchstone International Medical is expected to under-perform the Chongqing Changan. But the stock apears to be less risky and, when comparing its historical volatility, Touchstone International Medical is 1.27 times less risky than Chongqing Changan. The stock trades about 0.0 of its potential returns per unit of risk. The Chongqing Changan Automobile is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,370 in Chongqing Changan Automobile on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Chongqing Changan Automobile or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone International Medic vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Touchstone International |
| Chongqing Changan |
Touchstone International and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and Chongqing Changan
The main advantage of trading using opposite Touchstone International and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International 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.| Touchstone International vs. Bank of China | Touchstone International vs. Kweichow Moutai Co | Touchstone International vs. PetroChina Co Ltd | Touchstone International vs. Bank of Communications |
| Chongqing Changan vs. Lutian Machinery Co | Chongqing Changan vs. China Longyuan Power | Chongqing Changan vs. Changshu Tongrun Auto | Chongqing Changan vs. PetroChina Co Ltd |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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