Correlation Between Chongqing Brewery and Jason Furniture
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By analyzing existing cross correlation between Chongqing Brewery Co and Jason Furniture, you can compare the effects of market volatilities on Chongqing Brewery and Jason Furniture 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 Jason Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Jason Furniture.
Diversification Opportunities for Chongqing Brewery and Jason Furniture
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chongqing and Jason is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Jason Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jason Furniture 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 Jason Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jason Furniture has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Jason Furniture go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Jason Furniture
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to generate 0.82 times more return on investment than Jason Furniture. However, Chongqing Brewery Co is 1.21 times less risky than Jason Furniture. It trades about -0.08 of its potential returns per unit of risk. Jason Furniture is currently generating about -0.1 per unit of risk. If you would invest 6,075 in Chongqing Brewery Co on October 27, 2024 and sell it today you would lose (634.00) from holding Chongqing Brewery Co or give up 10.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Chongqing Brewery Co vs. Jason Furniture
Performance |
Timeline |
Chongqing Brewery |
Jason Furniture |
Chongqing Brewery and Jason Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chongqing Brewery and Jason Furniture
The main advantage of trading using opposite Chongqing Brewery and Jason Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Jason Furniture 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 Jason Furniture will offset losses from the drop in Jason Furniture's long position.Chongqing Brewery vs. Wintao Communications Co | Chongqing Brewery vs. Tianjin Hi Tech Development | Chongqing Brewery vs. Beijing Seeyon Internet | Chongqing Brewery vs. Guangzhou Dongfang Hotel |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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