Correlation Between Tieling Newcity and China Railway
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By analyzing existing cross correlation between Tieling Newcity Investment and China Railway Construction, you can compare the effects of market volatilities on Tieling Newcity and China Railway 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 Tieling Newcity with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tieling Newcity and China Railway.
Diversification Opportunities for Tieling Newcity and China Railway
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tieling and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tieling Newcity Investment and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Tieling Newcity 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 Tieling Newcity Investment are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Tieling Newcity i.e., Tieling Newcity and China Railway go up and down completely randomly.
Pair Corralation between Tieling Newcity and China Railway
Assuming the 90 days trading horizon Tieling Newcity is expected to generate 1.32 times less return on investment than China Railway. In addition to that, Tieling Newcity is 1.4 times more volatile than China Railway Construction. It trades about 0.01 of its total potential returns per unit of risk. China Railway Construction is currently generating about 0.03 per unit of volatility. If you would invest 382.00 in China Railway Construction on September 28, 2024 and sell it today you would earn a total of 68.00 from holding China Railway Construction or generate 17.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Tieling Newcity Investment vs. China Railway Construction
Performance |
| Timeline |
| Tieling Newcity Inve |
| China Railway Constr |
Tieling Newcity and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tieling Newcity and China Railway
The main advantage of trading using opposite Tieling Newcity and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tieling Newcity position performs unexpectedly, China Railway 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 Railway will offset losses from the drop in China Railway's long position.| Tieling Newcity vs. Industrial and Commercial | Tieling Newcity vs. Agricultural Bank of | Tieling Newcity vs. China Construction Bank | Tieling Newcity vs. Bank of China |
| China Railway vs. Kangping Technology Co | China Railway vs. Vanfund Urban Investment | China Railway vs. Tieling Newcity Investment | China Railway vs. Postal Savings Bank |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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