Correlation Between Hangzhou Weiguang and China Railway
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By analyzing existing cross correlation between Hangzhou Weiguang Electronic and China Railway Group, you can compare the effects of market volatilities on Hangzhou Weiguang 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 Hangzhou Weiguang with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Weiguang and China Railway.
Diversification Opportunities for Hangzhou Weiguang and China Railway
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hangzhou and China is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Weiguang Electronic 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 Hangzhou Weiguang 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 Hangzhou Weiguang Electronic 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 Hangzhou Weiguang i.e., Hangzhou Weiguang and China Railway go up and down completely randomly.
Pair Corralation between Hangzhou Weiguang and China Railway
Assuming the 90 days trading horizon Hangzhou Weiguang Electronic is expected to generate 1.3 times more return on investment than China Railway. However, Hangzhou Weiguang is 1.3 times more volatile than China Railway Group. It trades about 0.2 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 2,335 in Hangzhou Weiguang Electronic on September 14, 2024 and sell it today you would earn a total of 263.00 from holding Hangzhou Weiguang Electronic or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Weiguang Electronic vs. China Railway Group
Performance |
| Timeline |
| Hangzhou Weiguang |
| China Railway Group |
Hangzhou Weiguang and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Weiguang and China Railway
The main advantage of trading using opposite Hangzhou Weiguang and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Weiguang 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.| Hangzhou Weiguang vs. PetroChina Co Ltd | Hangzhou Weiguang vs. China Mobile Limited | Hangzhou Weiguang vs. CNOOC Limited | Hangzhou Weiguang vs. Ping An Insurance |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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