Correlation Between Central Plains and China Everbright
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By analyzing existing cross correlation between Central Plains Environment and China Everbright Bank, you can compare the effects of market volatilities on Central Plains and China Everbright 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 Central Plains with a short position of China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plains and China Everbright.
Diversification Opportunities for Central Plains and China Everbright
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Central and China is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Central Plains Environment and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank and Central Plains 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 Central Plains Environment are associated (or correlated) with China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of Central Plains i.e., Central Plains and China Everbright go up and down completely randomly.
Pair Corralation between Central Plains and China Everbright
Assuming the 90 days trading horizon Central Plains Environment is expected to generate 1.56 times more return on investment than China Everbright. However, Central Plains is 1.56 times more volatile than China Everbright Bank. It trades about 0.04 of its potential returns per unit of risk. China Everbright Bank is currently generating about 0.05 per unit of risk. If you would invest 619.00 in Central Plains Environment on October 12, 2024 and sell it today you would earn a total of 206.00 from holding Central Plains Environment or generate 33.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Central Plains Environment vs. China Everbright Bank
Performance |
| Timeline |
| Central Plains Envir |
| China Everbright Bank |
Central Plains and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Plains and China Everbright
The main advantage of trading using opposite Central Plains and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plains position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| Central Plains vs. Guangdong Liantai Environmental | Central Plains vs. City Development Environment | Central Plains vs. Lingyuan Iron Steel | Central Plains vs. Fujian Nanwang Environment |
| China Everbright vs. Guangzhou Dongfang Hotel | China Everbright vs. Guangzhou Ruoyuchen Information | China Everbright vs. Unisplendour Corp | China Everbright vs. ButOne Information Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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