Correlation Between Anhui Huaheng and Chongqing Changan
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and Chongqing Changan Automobile, you can compare the effects of market volatilities on Anhui Huaheng 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 Anhui Huaheng with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and Chongqing Changan.
Diversification Opportunities for Anhui Huaheng and Chongqing Changan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Chongqing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Anhui Huaheng 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 Anhui Huaheng Biotechnology 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 Anhui Huaheng i.e., Anhui Huaheng and Chongqing Changan go up and down completely randomly.
Pair Corralation between Anhui Huaheng and Chongqing Changan
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to under-perform the Chongqing Changan. In addition to that, Anhui Huaheng is 1.1 times more volatile than Chongqing Changan Automobile. It trades about -0.05 of its total potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.01 per unit of volatility. If you would invest 1,313 in Chongqing Changan Automobile on October 30, 2024 and sell it today you would lose (58.00) from holding Chongqing Changan Automobile or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaheng Biotechnology vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Anhui Huaheng Biotec |
| Chongqing Changan |
Anhui Huaheng and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and Chongqing Changan
The main advantage of trading using opposite Anhui Huaheng and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng 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.| Anhui Huaheng vs. Shandong Sanyuan Biotechnology | Anhui Huaheng vs. Shanghai Rightongene Biotechnology | Anhui Huaheng vs. Ningbo MedicalSystem Biotechnology | Anhui Huaheng vs. Gan Yuan Foods |
| Chongqing Changan vs. Dongfeng Automobile Co | Chongqing Changan vs. Beijing Bewinner Communications | Chongqing Changan vs. China Mobile Limited | Chongqing Changan vs. Wuhan Yangtze Communication |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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