Correlation Between Chongqing Brewery and GRIPM Advanced
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By analyzing existing cross correlation between Chongqing Brewery Co and GRIPM Advanced Materials, you can compare the effects of market volatilities on Chongqing Brewery and GRIPM Advanced 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 GRIPM Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and GRIPM Advanced.
Diversification Opportunities for Chongqing Brewery and GRIPM Advanced
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and GRIPM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and GRIPM Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIPM Advanced Materials 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 GRIPM Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIPM Advanced Materials has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and GRIPM Advanced go up and down completely randomly.
Pair Corralation between Chongqing Brewery and GRIPM Advanced
Assuming the 90 days trading horizon Chongqing Brewery is expected to generate 3.34 times less return on investment than GRIPM Advanced. But when comparing it to its historical volatility, Chongqing Brewery Co is 1.4 times less risky than GRIPM Advanced. It trades about 0.04 of its potential returns per unit of risk. GRIPM Advanced Materials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,951 in GRIPM Advanced Materials on September 26, 2024 and sell it today you would earn a total of 496.00 from holding GRIPM Advanced Materials or generate 16.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Chongqing Brewery Co vs. GRIPM Advanced Materials
Performance |
Timeline |
Chongqing Brewery |
GRIPM Advanced Materials |
Chongqing Brewery and GRIPM Advanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chongqing Brewery and GRIPM Advanced
The main advantage of trading using opposite Chongqing Brewery and GRIPM Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, GRIPM Advanced 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 GRIPM Advanced will offset losses from the drop in GRIPM Advanced's long position.Chongqing Brewery vs. BYD Co Ltd | Chongqing Brewery vs. China Mobile Limited | Chongqing Brewery vs. Agricultural Bank of | Chongqing Brewery vs. Industrial and Commercial |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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