Correlation Between Shenzhen Zhongzhuang and China Railway
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and China Railway Construction, you can compare the effects of market volatilities on Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and China Railway.
Diversification Opportunities for Shenzhen Zhongzhuang and China Railway
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct 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 Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang Construction 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 Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and China Railway go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and China Railway
Assuming the 90 days trading horizon Shenzhen Zhongzhuang is expected to generate 1.59 times less return on investment than China Railway. In addition to that, Shenzhen Zhongzhuang is 2.0 times more volatile than China Railway Construction. It trades about 0.02 of its total potential returns per unit of risk. China Railway Construction is currently generating about 0.06 per unit of volatility. If you would invest 380.00 in China Railway Construction on September 12, 2024 and sell it today you would earn a total of 103.00 from holding China Railway Construction or generate 27.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. China Railway Construction
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
| China Railway Constr |
Shenzhen Zhongzhuang and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and China Railway
The main advantage of trading using opposite Shenzhen Zhongzhuang and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang 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.| Shenzhen Zhongzhuang vs. Agricultural Bank of | Shenzhen Zhongzhuang vs. Industrial and Commercial | Shenzhen Zhongzhuang vs. Bank of China | Shenzhen Zhongzhuang vs. PetroChina Co Ltd |
| China Railway vs. Agricultural Bank of | China Railway vs. Industrial and Commercial | China Railway vs. Bank of China | China Railway vs. PetroChina Co Ltd |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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