Correlation Between Shandong Hongchuang and China Railway
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and China Railway Construction, you can compare the effects of market volatilities on Shandong Hongchuang 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 Shandong Hongchuang with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and China Railway.
Diversification Opportunities for Shandong Hongchuang and China Railway
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shandong and China is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Shandong Hongchuang 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 Shandong Hongchuang Aluminum 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 Constr has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and China Railway go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and China Railway
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 1.62 times more return on investment than China Railway. However, Shandong Hongchuang is 1.62 times more volatile than China Railway Construction. It trades about 0.14 of its potential returns per unit of risk. China Railway Construction is currently generating about 0.03 per unit of risk. If you would invest 444.00 in Shandong Hongchuang Aluminum on October 25, 2024 and sell it today you would earn a total of 556.00 from holding Shandong Hongchuang Aluminum or generate 125.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. China Railway Construction
Performance |
| Timeline |
| Shandong Hongchuang |
| China Railway Constr |
Shandong Hongchuang and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and China Railway
The main advantage of trading using opposite Shandong Hongchuang and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang 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.| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Rongsheng Petrochemical Co |
| China Railway vs. Omnijoi Media Corp | China Railway vs. Shuhua Sports Co | China Railway vs. Hangzhou Guotai Environmental | China Railway vs. Elite Color Environmental |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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