Correlation Between Chongqing Machinery and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery and Acadia Realty at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chongqing Machinery and Acadia Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chongqing Machinery Electric and Acadia Realty Trust, you can compare the effects of market volatilities on Chongqing Machinery and Acadia Realty 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 Chongqing Machinery with a short position of Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and Acadia Realty.
Diversification Opportunities for Chongqing Machinery and Acadia Realty
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chongqing and Acadia is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust and Chongqing 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 Chongqing Machinery Electric are associated (or correlated) with Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Chongqing Machinery i.e., Chongqing Machinery and Acadia Realty go up and down completely randomly.
Pair Corralation between Chongqing Machinery and Acadia Realty
Assuming the 90 days horizon Chongqing Machinery Electric is expected to generate 3.28 times more return on investment than Acadia Realty. However, Chongqing Machinery is 3.28 times more volatile than Acadia Realty Trust. It trades about 0.24 of its potential returns per unit of risk. Acadia Realty Trust is currently generating about -0.26 per unit of risk. If you would invest 7.40 in Chongqing Machinery Electric on October 1, 2024 and sell it today you would earn a total of 1.10 from holding Chongqing Machinery Electric or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. Acadia Realty Trust
Performance |
| Timeline |
| Chongqing Machinery |
| Acadia Realty Trust |
Chongqing Machinery and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and Acadia Realty
The main advantage of trading using opposite Chongqing Machinery and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery position performs unexpectedly, Acadia Realty 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.The idea behind Chongqing Machinery Electric and Acadia Realty Trust 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.| Acadia Realty vs. Simon Property Group | Acadia Realty vs. Kimco Realty | Acadia Realty vs. Brixmor Property Group | Acadia Realty vs. Vicinity Centres |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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