Correlation Between Chengdu Xinzhu and Central China
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By analyzing existing cross correlation between Chengdu Xinzhu RoadBridge and Central China Land, you can compare the effects of market volatilities on Chengdu Xinzhu and Central China 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 Chengdu Xinzhu with a short position of Central China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xinzhu and Central China.
Diversification Opportunities for Chengdu Xinzhu and Central China
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chengdu and Central is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xinzhu RoadBridge and Central China Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central China Land and Chengdu Xinzhu 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 Chengdu Xinzhu RoadBridge are associated (or correlated) with Central China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central China Land has no effect on the direction of Chengdu Xinzhu i.e., Chengdu Xinzhu and Central China go up and down completely randomly.
Pair Corralation between Chengdu Xinzhu and Central China
Assuming the 90 days trading horizon Chengdu Xinzhu RoadBridge is expected to generate 1.65 times more return on investment than Central China. However, Chengdu Xinzhu is 1.65 times more volatile than Central China Land. It trades about 0.1 of its potential returns per unit of risk. Central China Land is currently generating about 0.05 per unit of risk. If you would invest 496.00 in Chengdu Xinzhu RoadBridge on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Chengdu Xinzhu RoadBridge or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xinzhu RoadBridge vs. Central China Land
Performance |
| Timeline |
| Chengdu Xinzhu RoadBridge |
| Central China Land |
Chengdu Xinzhu and Central China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xinzhu and Central China
The main advantage of trading using opposite Chengdu Xinzhu and Central China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xinzhu position performs unexpectedly, Central China 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 Central China will offset losses from the drop in Central China's long position.| Chengdu Xinzhu vs. Cultural Investment Holdings | Chengdu Xinzhu vs. Gome Telecom Equipment | Chengdu Xinzhu vs. Bus Online Co | Chengdu Xinzhu vs. Holitech Technology Co |
| Central China vs. Uroica Mining Safety | Central China vs. Anhui Jianghuai Automobile | Central China vs. Ye Chiu Metal | Central China vs. Zhejiang Yayi Metal |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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