Correlation Between ChengDu Hi and Tongling Nonferrous
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By analyzing existing cross correlation between ChengDu Hi Tech Development and Tongling Nonferrous Metals, you can compare the effects of market volatilities on ChengDu Hi and Tongling Nonferrous 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 ChengDu Hi with a short position of Tongling Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChengDu Hi and Tongling Nonferrous.
Diversification Opportunities for ChengDu Hi and Tongling Nonferrous
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ChengDu and Tongling is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ChengDu Hi Tech Development and Tongling Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongling Nonferrous and ChengDu Hi 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 ChengDu Hi Tech Development are associated (or correlated) with Tongling Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongling Nonferrous has no effect on the direction of ChengDu Hi i.e., ChengDu Hi and Tongling Nonferrous go up and down completely randomly.
Pair Corralation between ChengDu Hi and Tongling Nonferrous
Assuming the 90 days trading horizon ChengDu Hi Tech Development is expected to generate 1.76 times more return on investment than Tongling Nonferrous. However, ChengDu Hi is 1.76 times more volatile than Tongling Nonferrous Metals. It trades about 0.1 of its potential returns per unit of risk. Tongling Nonferrous Metals is currently generating about -0.01 per unit of risk. If you would invest 4,203 in ChengDu Hi Tech Development on September 25, 2024 and sell it today you would earn a total of 1,927 from holding ChengDu Hi Tech Development or generate 45.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ChengDu Hi Tech Development vs. Tongling Nonferrous Metals
Performance |
Timeline |
ChengDu Hi Tech |
Tongling Nonferrous |
ChengDu Hi and Tongling Nonferrous Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ChengDu Hi and Tongling Nonferrous
The main advantage of trading using opposite ChengDu Hi and Tongling Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChengDu Hi position performs unexpectedly, Tongling Nonferrous 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 Tongling Nonferrous will offset losses from the drop in Tongling Nonferrous' long position.ChengDu Hi vs. Glodon Software Co | ChengDu Hi vs. Kingclean Electric Co | ChengDu Hi vs. Dareway Software Co | ChengDu Hi vs. Chinese Universe Publishing |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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