Correlation Between China Securities and Shaanxi Construction
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By analyzing existing cross correlation between China Securities 800 and Shaanxi Construction Machinery, you can compare the effects of market volatilities on China Securities and Shaanxi Construction 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 Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Shaanxi Construction.
Diversification Opportunities for China Securities and Shaanxi Construction
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Shaanxi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction 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 Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of China Securities i.e., China Securities and Shaanxi Construction go up and down completely randomly.
Pair Corralation between China Securities and Shaanxi Construction
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Shaanxi Construction. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 2.97 times less risky than Shaanxi Construction. The index trades about -0.03 of its potential returns per unit of risk. The Shaanxi Construction Machinery is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 323.00 in Shaanxi Construction Machinery on August 25, 2024 and sell it today you would earn a total of 16.00 from holding Shaanxi Construction Machinery or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Shaanxi Construction Machinery
Performance |
| Timeline |
China Securities and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Shaanxi Construction Machinery
Pair trading matchups for Shaanxi Construction
Pair Trading with China Securities and Shaanxi Construction
The main advantage of trading using opposite China Securities and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| China Securities vs. Zhejiang Yayi Metal | China Securities vs. Huatian Hotel Group | China Securities vs. Semiconductor Manufacturing Electronics | China Securities vs. Dalian Thermal Power |
| Shaanxi Construction vs. Chengdu Kanghua Biological | Shaanxi Construction vs. Beijing Wantai Biological | Shaanxi Construction vs. Suzhou Novoprotein Scientific | Shaanxi Construction vs. Aluminum Corp of |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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