Correlation Between Chongqing Brewery and Qilu Bank
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By analyzing existing cross correlation between Chongqing Brewery Co and Qilu Bank Co, you can compare the effects of market volatilities on Chongqing Brewery and Qilu Bank 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 Brewery with a short position of Qilu Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Qilu Bank.
Diversification Opportunities for Chongqing Brewery and Qilu Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Qilu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Qilu Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qilu Bank and Chongqing Brewery 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 Brewery Co are associated (or correlated) with Qilu Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qilu Bank has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Qilu Bank go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Qilu Bank
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to generate 1.3 times more return on investment than Qilu Bank. However, Chongqing Brewery is 1.3 times more volatile than Qilu Bank Co. It trades about 0.17 of its potential returns per unit of risk. Qilu Bank Co is currently generating about 0.18 per unit of risk. If you would invest 5,139 in Chongqing Brewery Co on September 16, 2024 and sell it today you would earn a total of 1,656 from holding Chongqing Brewery Co or generate 32.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chongqing Brewery Co vs. Qilu Bank Co
Performance |
Timeline |
Chongqing Brewery |
Qilu Bank |
Chongqing Brewery and Qilu Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chongqing Brewery and Qilu Bank
The main advantage of trading using opposite Chongqing Brewery and Qilu Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Qilu Bank 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 Qilu Bank will offset losses from the drop in Qilu Bank's long position.Chongqing Brewery vs. Western Metal Materials | Chongqing Brewery vs. Long Yuan Construction | Chongqing Brewery vs. Tengda Construction Group | Chongqing Brewery vs. Allied Machinery 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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