Correlation Between LianChuang Electronic and China Railway
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By analyzing existing cross correlation between LianChuang Electronic Technology and China Railway Group, you can compare the effects of market volatilities on LianChuang Electronic 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 LianChuang Electronic with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of LianChuang Electronic and China Railway.
Diversification Opportunities for LianChuang Electronic and China Railway
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LianChuang and China is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding LianChuang Electronic Technolo 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 LianChuang Electronic 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 LianChuang Electronic Technology 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 LianChuang Electronic i.e., LianChuang Electronic and China Railway go up and down completely randomly.
Pair Corralation between LianChuang Electronic and China Railway
Assuming the 90 days trading horizon LianChuang Electronic Technology is expected to generate 1.96 times more return on investment than China Railway. However, LianChuang Electronic is 1.96 times more volatile than China Railway Group. It trades about -0.01 of its potential returns per unit of risk. China Railway Group is currently generating about -0.03 per unit of risk. If you would invest 1,104 in LianChuang Electronic Technology on September 14, 2024 and sell it today you would lose (21.00) from holding LianChuang Electronic Technology or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LianChuang Electronic Technolo vs. China Railway Group
Performance |
| Timeline |
| LianChuang Electronic |
| China Railway Group |
LianChuang Electronic and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LianChuang Electronic and China Railway
The main advantage of trading using opposite LianChuang Electronic and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LianChuang Electronic 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.| LianChuang Electronic vs. Industrial and Commercial | LianChuang Electronic vs. Agricultural Bank of | LianChuang Electronic vs. China Construction Bank | LianChuang Electronic vs. Bank of China |
| China Railway vs. Beijing Mainstreets Investment | China Railway vs. Linewell Software Co | China Railway vs. Zhongrun Resources Investment | China Railway vs. Luyin Investment Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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