Correlation Between China Securities and Shanxi Xishan
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By analyzing existing cross correlation between China Securities 800 and Shanxi Xishan Coal, you can compare the effects of market volatilities on China Securities and Shanxi Xishan 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 Shanxi Xishan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Shanxi Xishan.
Diversification Opportunities for China Securities and Shanxi Xishan
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shanxi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Shanxi Xishan Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Xishan Coal 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 Shanxi Xishan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Xishan Coal has no effect on the direction of China Securities i.e., China Securities and Shanxi Xishan go up and down completely randomly.
Pair Corralation between China Securities and Shanxi Xishan
Assuming the 90 days trading horizon China Securities 800 is expected to generate 1.29 times more return on investment than Shanxi Xishan. However, China Securities is 1.29 times more volatile than Shanxi Xishan Coal. It trades about 0.01 of its potential returns per unit of risk. Shanxi Xishan Coal is currently generating about -0.04 per unit of risk. If you would invest 422,415 in China Securities 800 on September 1, 2024 and sell it today you would earn a total of 1,121 from holding China Securities 800 or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Shanxi Xishan Coal
Performance |
| Timeline |
China Securities and Shanxi Xishan Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Shanxi Xishan Coal
Pair trading matchups for Shanxi Xishan
Pair Trading with China Securities and Shanxi Xishan
The main advantage of trading using opposite China Securities and Shanxi Xishan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Shanxi Xishan 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 Shanxi Xishan will offset losses from the drop in Shanxi Xishan's long position.| China Securities vs. Everjoy Health Group | China Securities vs. Fuzhou Rockchip Electronics | China Securities vs. Hangzhou Prevail Optoelectronic | China Securities vs. Aurora Optoelectronics Co |
| Shanxi Xishan vs. Zhejiang Kingland Pipeline | Shanxi Xishan vs. Zhejiang Dahua Technology | Shanxi Xishan vs. Changchun Faway Automobile | Shanxi Xishan vs. Shanghai Lingyun Industries |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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