Correlation Between Focus Media and China Railway
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By analyzing existing cross correlation between Focus Media Information and China Railway Group, you can compare the effects of market volatilities on Focus Media and China Railway 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 Focus Media with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Media and China Railway.
Diversification Opportunities for Focus Media and China Railway
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Focus and China is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Focus Media Information and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group and Focus Media 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 Focus Media Information are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Group has no effect on the direction of Focus Media i.e., Focus Media and China Railway go up and down completely randomly.
Pair Corralation between Focus Media and China Railway
Assuming the 90 days trading horizon Focus Media Information is expected to under-perform the China Railway. But the stock apears to be less risky and, when comparing its historical volatility, Focus Media Information is 1.39 times less risky than China Railway. The stock trades about -0.12 of its potential returns per unit of risk. The China Railway Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 641.00 in China Railway Group on September 1, 2024 and sell it today you would earn a total of 0.00 from holding China Railway Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Media Information vs. China Railway Group
Performance |
| Timeline |
| Focus Media Information |
| China Railway Group |
Focus Media and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Media and China Railway
The main advantage of trading using opposite Focus Media and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Media position performs unexpectedly, China Railway 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 Railway will offset losses from the drop in China Railway's long position.| Focus Media vs. Semiconductor Manufacturing Intl | Focus Media vs. Anhui Conch Cement | Focus Media vs. Sungrow Power Supply | Focus Media vs. Shenzhen New Nanshan |
| China Railway vs. Shanghai Jinfeng Wine | China Railway vs. Changchun Engley Automobile | China Railway vs. Haima Automobile Group | China Railway vs. Xinjiang Communications Construction |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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