Correlation Between China Securities and China Union
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By analyzing existing cross correlation between China Securities 800 and China Union Holdings, you can compare the effects of market volatilities on China Securities and China Union 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 China Securities with a short position of China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and China Union.
Diversification Opportunities for China Securities and China Union
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and China is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings and China Securities 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 China Securities 800 are associated (or correlated) with China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of China Securities i.e., China Securities and China Union go up and down completely randomly.
Pair Corralation between China Securities and China Union
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.42 times more return on investment than China Union. However, China Securities 800 is 2.4 times less risky than China Union. It trades about 0.17 of its potential returns per unit of risk. China Union Holdings is currently generating about -0.62 per unit of risk. If you would invest 414,387 in China Securities 800 on September 27, 2024 and sell it today you would earn a total of 14,462 from holding China Securities 800 or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. China Union Holdings
Performance |
| Timeline |
China Securities and China Union Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
China Union Holdings
Pair trading matchups for China Union
Pair Trading with China Securities and China Union
The main advantage of trading using opposite China Securities and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, China Union 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 Union will offset losses from the drop in China Union's long position.| China Securities vs. Zhongshan Public Utilities | China Securities vs. Jiangsu GDK Biotechnology | China Securities vs. Sichuan Hebang Biotechnology | China Securities vs. Sunny Loan Top |
| China Union vs. PetroChina Co Ltd | China Union vs. China Mobile Limited | China Union vs. CNOOC Limited | China Union vs. Ping An Insurance |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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