Correlation Between China Securities and Zhejiang Transfar
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By analyzing existing cross correlation between China Securities 800 and Zhejiang Transfar Co, you can compare the effects of market volatilities on China Securities and Zhejiang Transfar 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 Zhejiang Transfar. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Zhejiang Transfar.
Diversification Opportunities for China Securities and Zhejiang Transfar
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Zhejiang is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Zhejiang Transfar Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Transfar 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 Zhejiang Transfar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Transfar has no effect on the direction of China Securities i.e., China Securities and Zhejiang Transfar go up and down completely randomly.
Pair Corralation between China Securities and Zhejiang Transfar
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.4 times more return on investment than Zhejiang Transfar. However, China Securities 800 is 2.51 times less risky than Zhejiang Transfar. It trades about -0.14 of its potential returns per unit of risk. Zhejiang Transfar Co is currently generating about -0.14 per unit of risk. If you would invest 449,702 in China Securities 800 on September 12, 2024 and sell it today you would lose (17,204) from holding China Securities 800 or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Securities 800 vs. Zhejiang Transfar Co
Performance |
| Timeline |
China Securities and Zhejiang Transfar Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Zhejiang Transfar Co
Pair trading matchups for Zhejiang Transfar
Pair Trading with China Securities and Zhejiang Transfar
The main advantage of trading using opposite China Securities and Zhejiang Transfar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Zhejiang Transfar 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 Zhejiang Transfar will offset losses from the drop in Zhejiang Transfar's long position.| China Securities vs. Ningxia Building Materials | China Securities vs. Western Metal Materials | China Securities vs. Ningbo Bohui Chemical | China Securities vs. Hengerda New Materials |
| Zhejiang Transfar vs. Metallurgical of | Zhejiang Transfar vs. Beijing HuaYuanYiTong Thermal | Zhejiang Transfar vs. Yili Chuanning Biotechnology | Zhejiang Transfar vs. Liaoning Chengda Biotechnology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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