Correlation Between Henan Shuanghui and China Railway
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By analyzing existing cross correlation between Henan Shuanghui Investment and China Railway Construction, you can compare the effects of market volatilities on Henan Shuanghui 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 Henan Shuanghui with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henan Shuanghui and China Railway.
Diversification Opportunities for Henan Shuanghui and China Railway
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Henan and China is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Henan Shuanghui 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 Henan Shuanghui 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 Henan Shuanghui 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 Henan Shuanghui i.e., Henan Shuanghui and China Railway go up and down completely randomly.
Pair Corralation between Henan Shuanghui and China Railway
Assuming the 90 days trading horizon Henan Shuanghui is expected to generate 1.44 times less return on investment than China Railway. But when comparing it to its historical volatility, Henan Shuanghui Investment is 1.37 times less risky than China Railway. It trades about 0.08 of its potential returns per unit of risk. China Railway Construction is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 348.00 in China Railway Construction on October 7, 2024 and sell it today you would earn a total of 75.00 from holding China Railway Construction or generate 21.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henan Shuanghui Investment vs. China Railway Construction
Performance |
| Timeline |
| Henan Shuanghui Inve |
| China Railway Constr |
Henan Shuanghui and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henan Shuanghui and China Railway
The main advantage of trading using opposite Henan Shuanghui and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henan Shuanghui 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.| Henan Shuanghui vs. China Petroleum Chemical | Henan Shuanghui vs. PetroChina Co Ltd | Henan Shuanghui vs. China Railway Construction | Henan Shuanghui vs. China Mobile Limited |
| China Railway vs. Penyao Environmental Protection | China Railway vs. Huatian Hotel Group | China Railway vs. Qiaoyin Environmental Tech | China Railway vs. Hangzhou Guotai Environmental |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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