Correlation Between Yuan Longping and China State
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By analyzing existing cross correlation between Yuan Longping High tech and China State Construction, you can compare the effects of market volatilities on Yuan Longping and China State 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 Yuan Longping with a short position of China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Longping and China State.
Diversification Opportunities for Yuan Longping and China State
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuan and China is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Longping High tech and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction and Yuan Longping 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 Yuan Longping High tech are associated (or correlated) with China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Yuan Longping i.e., Yuan Longping and China State go up and down completely randomly.
Pair Corralation between Yuan Longping and China State
Assuming the 90 days trading horizon Yuan Longping High tech is expected to under-perform the China State. In addition to that, Yuan Longping is 1.12 times more volatile than China State Construction. It trades about -0.11 of its total potential returns per unit of risk. China State Construction is currently generating about -0.06 per unit of volatility. If you would invest 614.00 in China State Construction on August 29, 2024 and sell it today you would lose (18.00) from holding China State Construction or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan Longping High tech vs. China State Construction
Performance |
| Timeline |
| Yuan Longping High |
| China State Construction |
Yuan Longping and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Longping and China State
The main advantage of trading using opposite Yuan Longping and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Longping position performs unexpectedly, China State 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 State will offset losses from the drop in China State's long position.| Yuan Longping vs. PetroChina Co Ltd | Yuan Longping vs. China Mobile Limited | Yuan Longping vs. Ping An Insurance | Yuan Longping vs. China Petroleum Chemical |
| China State vs. Shenyang Chemical Industry | China State vs. Lianhe Chemical Technology | China State vs. North Huajin Chemical | China State vs. Maoming Petro Chemical Shihua |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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