Correlation Between Crown Advanced and Changshu Tongrun
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By analyzing existing cross correlation between Crown Advanced Material and Changshu Tongrun Auto, you can compare the effects of market volatilities on Crown Advanced and Changshu Tongrun 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 Crown Advanced with a short position of Changshu Tongrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Advanced and Changshu Tongrun.
Diversification Opportunities for Crown Advanced and Changshu Tongrun
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crown and Changshu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Crown Advanced Material and Changshu Tongrun Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Tongrun Auto and Crown Advanced 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 Crown Advanced Material are associated (or correlated) with Changshu Tongrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Tongrun Auto has no effect on the direction of Crown Advanced i.e., Crown Advanced and Changshu Tongrun go up and down completely randomly.
Pair Corralation between Crown Advanced and Changshu Tongrun
Assuming the 90 days trading horizon Crown Advanced Material is expected to under-perform the Changshu Tongrun. In addition to that, Crown Advanced is 1.38 times more volatile than Changshu Tongrun Auto. It trades about -0.06 of its total potential returns per unit of risk. Changshu Tongrun Auto is currently generating about 0.02 per unit of volatility. If you would invest 1,629 in Changshu Tongrun Auto on August 25, 2024 and sell it today you would earn a total of 184.00 from holding Changshu Tongrun Auto or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Crown Advanced Material vs. Changshu Tongrun Auto
Performance |
| Timeline |
| Crown Advanced Material |
| Changshu Tongrun Auto |
Crown Advanced and Changshu Tongrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Advanced and Changshu Tongrun
The main advantage of trading using opposite Crown Advanced and Changshu Tongrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Advanced position performs unexpectedly, Changshu Tongrun 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 Changshu Tongrun will offset losses from the drop in Changshu Tongrun's long position.| Crown Advanced vs. Dongnan Electronics Co | Crown Advanced vs. Xilong Chemical Co | Crown Advanced vs. Shandong Ruifeng Chemical | Crown Advanced vs. Hoshine Silicon Ind |
| Changshu Tongrun vs. Crown Advanced Material | Changshu Tongrun vs. Ningbo Fangzheng Automobile | Changshu Tongrun vs. Dongfeng Automobile Co | Changshu Tongrun vs. Anhui Jianghuai Automobile |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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