Correlation Between Anhui Huaren and Chongqing Changan
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By analyzing existing cross correlation between Anhui Huaren Health and Chongqing Changan Automobile, you can compare the effects of market volatilities on Anhui Huaren and Chongqing Changan 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 Anhui Huaren with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaren and Chongqing Changan.
Diversification Opportunities for Anhui Huaren and Chongqing Changan
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Chongqing is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaren Health and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Anhui Huaren 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 Anhui Huaren Health are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Anhui Huaren i.e., Anhui Huaren and Chongqing Changan go up and down completely randomly.
Pair Corralation between Anhui Huaren and Chongqing Changan
Assuming the 90 days trading horizon Anhui Huaren Health is expected to generate 1.97 times more return on investment than Chongqing Changan. However, Anhui Huaren is 1.97 times more volatile than Chongqing Changan Automobile. It trades about 0.07 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.07 per unit of risk. If you would invest 1,059 in Anhui Huaren Health on September 6, 2024 and sell it today you would earn a total of 138.00 from holding Anhui Huaren Health or generate 13.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.28% |
Values | Daily Returns |
Anhui Huaren Health vs. Chongqing Changan Automobile
Performance |
Timeline |
Anhui Huaren Health |
Chongqing Changan |
Anhui Huaren and Chongqing Changan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anhui Huaren and Chongqing Changan
The main advantage of trading using opposite Anhui Huaren and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaren position performs unexpectedly, Chongqing Changan 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 Chongqing Changan will offset losses from the drop in Chongqing Changan's long position.Anhui Huaren vs. Shandong Mining Machinery | Anhui Huaren vs. Guangdong Jingyi Metal | Anhui Huaren vs. Tianjin Capital Environmental | Anhui Huaren vs. Minmetals Capital Co |
Chongqing Changan vs. Harvest Fund Management | Chongqing Changan vs. Chengdu Spaceon Electronics | Chongqing Changan vs. JCHX Mining Management | Chongqing Changan vs. Shaanxi Energy Investment |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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