Correlation Between Chongqing Sulian and Kangxin New
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By analyzing existing cross correlation between Chongqing Sulian Plastic and Kangxin New Materials, you can compare the effects of market volatilities on Chongqing Sulian and Kangxin New 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 Sulian with a short position of Kangxin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Sulian and Kangxin New.
Diversification Opportunities for Chongqing Sulian and Kangxin New
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Kangxin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Sulian Plastic and Kangxin New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangxin New Materials and Chongqing Sulian 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 Sulian Plastic are associated (or correlated) with Kangxin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangxin New Materials has no effect on the direction of Chongqing Sulian i.e., Chongqing Sulian and Kangxin New go up and down completely randomly.
Pair Corralation between Chongqing Sulian and Kangxin New
Assuming the 90 days trading horizon Chongqing Sulian is expected to generate 1.44 times less return on investment than Kangxin New. In addition to that, Chongqing Sulian is 1.03 times more volatile than Kangxin New Materials. It trades about 0.11 of its total potential returns per unit of risk. Kangxin New Materials is currently generating about 0.17 per unit of volatility. If you would invest 159.00 in Kangxin New Materials on September 25, 2024 and sell it today you would earn a total of 71.00 from holding Kangxin New Materials or generate 44.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Chongqing Sulian Plastic vs. Kangxin New Materials
Performance |
Timeline |
Chongqing Sulian Plastic |
Kangxin New Materials |
Chongqing Sulian and Kangxin New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chongqing Sulian and Kangxin New
The main advantage of trading using opposite Chongqing Sulian and Kangxin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Sulian position performs unexpectedly, Kangxin New 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 Kangxin New will offset losses from the drop in Kangxin New's long position.Chongqing Sulian vs. China Life Insurance | Chongqing Sulian vs. Cinda Securities Co | Chongqing Sulian vs. Piotech Inc A | Chongqing Sulian vs. Dongxing Sec Co |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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