Correlation Between Jiangxi Hengda and China Railway
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and China Railway Construction, you can compare the effects of market volatilities on Jiangxi Hengda 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 Jiangxi Hengda with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and China Railway.
Diversification Opportunities for Jiangxi Hengda and China Railway
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jiangxi and China is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech 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 Jiangxi Hengda 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 Jiangxi Hengda Hi Tech 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 Jiangxi Hengda i.e., Jiangxi Hengda and China Railway go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and China Railway
Assuming the 90 days trading horizon Jiangxi Hengda Hi Tech is expected to generate 2.91 times more return on investment than China Railway. However, Jiangxi Hengda is 2.91 times more volatile than China Railway Construction. It trades about 0.01 of its potential returns per unit of risk. China Railway Construction is currently generating about -0.27 per unit of risk. If you would invest 492.00 in Jiangxi Hengda Hi Tech on November 1, 2024 and sell it today you would lose (1.00) from holding Jiangxi Hengda Hi Tech or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. China Railway Construction
Performance |
| Timeline |
| Jiangxi Hengda Hi |
| China Railway Constr |
Jiangxi Hengda and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Hengda and China Railway
The main advantage of trading using opposite Jiangxi Hengda and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda 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.| Jiangxi Hengda vs. Chenzhou Jingui Silver | Jiangxi Hengda vs. Shenyang Blue Silver | Jiangxi Hengda vs. Hainan Mining Co | Jiangxi Hengda vs. Dazhong Transportation Group |
| China Railway vs. BTG Hotels Group | China Railway vs. Fujian Newland Computer | China Railway vs. Jiangxi Hengda Hi Tech | China Railway vs. Lier Chemical Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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