Correlation Between Chengdu Spaceon and Changchun Faway
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By analyzing existing cross correlation between Chengdu Spaceon Electronics and Changchun Faway Automobile, you can compare the effects of market volatilities on Chengdu Spaceon and Changchun Faway 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 Spaceon with a short position of Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Spaceon and Changchun Faway.
Diversification Opportunities for Chengdu Spaceon and Changchun Faway
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Changchun is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Spaceon Electronics and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto and Chengdu Spaceon 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 Spaceon Electronics are associated (or correlated) with Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Chengdu Spaceon i.e., Chengdu Spaceon and Changchun Faway go up and down completely randomly.
Pair Corralation between Chengdu Spaceon and Changchun Faway
Assuming the 90 days trading horizon Chengdu Spaceon Electronics is expected to generate 1.42 times more return on investment than Changchun Faway. However, Chengdu Spaceon is 1.42 times more volatile than Changchun Faway Automobile. It trades about 0.13 of its potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.14 per unit of risk. If you would invest 1,311 in Chengdu Spaceon Electronics on September 24, 2024 and sell it today you would earn a total of 363.00 from holding Chengdu Spaceon Electronics or generate 27.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.36% |
Values | Daily Returns |
Chengdu Spaceon Electronics vs. Changchun Faway Automobile
Performance |
Timeline |
Chengdu Spaceon Elec |
Changchun Faway Auto |
Chengdu Spaceon and Changchun Faway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chengdu Spaceon and Changchun Faway
The main advantage of trading using opposite Chengdu Spaceon and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Spaceon position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.Chengdu Spaceon vs. Ningbo Fangzheng Automobile | Chengdu Spaceon vs. Dongfeng Automobile Co | Chengdu Spaceon vs. Dezhan HealthCare Co | Chengdu Spaceon vs. Songz Automobile Air |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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