Correlation Between Leaguer Shenzhen and Chongqing Changan
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By analyzing existing cross correlation between Leaguer Shenzhen MicroElectronics and Chongqing Changan Automobile, you can compare the effects of market volatilities on Leaguer Shenzhen 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 Leaguer Shenzhen with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaguer Shenzhen and Chongqing Changan.
Diversification Opportunities for Leaguer Shenzhen and Chongqing Changan
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leaguer and Chongqing is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Leaguer Shenzhen MicroElectron and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Leaguer Shenzhen 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 Leaguer Shenzhen MicroElectronics 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 Leaguer Shenzhen i.e., Leaguer Shenzhen and Chongqing Changan go up and down completely randomly.
Pair Corralation between Leaguer Shenzhen and Chongqing Changan
Assuming the 90 days trading horizon Leaguer Shenzhen MicroElectronics is expected to generate 2.38 times more return on investment than Chongqing Changan. However, Leaguer Shenzhen is 2.38 times more volatile than Chongqing Changan Automobile. It trades about 0.17 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.09 per unit of risk. If you would invest 1,914 in Leaguer Shenzhen MicroElectronics on September 7, 2024 and sell it today you would earn a total of 926.00 from holding Leaguer Shenzhen MicroElectronics or generate 48.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Leaguer Shenzhen MicroElectron vs. Chongqing Changan Automobile
Performance |
Timeline |
Leaguer Shenzhen Mic |
Chongqing Changan |
Leaguer Shenzhen and Chongqing Changan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leaguer Shenzhen and Chongqing Changan
The main advantage of trading using opposite Leaguer Shenzhen and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaguer Shenzhen 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.Leaguer Shenzhen vs. Industrial and Commercial | Leaguer Shenzhen vs. China Construction Bank | Leaguer Shenzhen vs. Bank of China | Leaguer Shenzhen vs. Agricultural Bank of |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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