Correlation Between Chongqing Changan and Zijin Mining
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By analyzing existing cross correlation between Chongqing Changan Automobile and Zijin Mining Group, you can compare the effects of market volatilities on Chongqing Changan and Zijin Mining 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 Changan with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Changan and Zijin Mining.
Diversification Opportunities for Chongqing Changan and Zijin Mining
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chongqing and Zijin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Changan Automobile and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group and Chongqing Changan 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 Changan Automobile are associated (or correlated) with Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Chongqing Changan i.e., Chongqing Changan and Zijin Mining go up and down completely randomly.
Pair Corralation between Chongqing Changan and Zijin Mining
Assuming the 90 days trading horizon Chongqing Changan Automobile is expected to generate 1.06 times more return on investment than Zijin Mining. However, Chongqing Changan is 1.06 times more volatile than Zijin Mining Group. It trades about 0.05 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.02 per unit of risk. If you would invest 1,390 in Chongqing Changan Automobile on September 26, 2024 and sell it today you would earn a total of 19.00 from holding Chongqing Changan Automobile or generate 1.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chongqing Changan Automobile vs. Zijin Mining Group
Performance |
Timeline |
Chongqing Changan |
Zijin Mining Group |
Chongqing Changan and Zijin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chongqing Changan and Zijin Mining
The main advantage of trading using opposite Chongqing Changan and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Changan position performs unexpectedly, Zijin Mining 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.Chongqing Changan vs. New China Life | Chongqing Changan vs. Ming Yang Smart | Chongqing Changan vs. 159681 | Chongqing Changan vs. 159005 |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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