Correlation Between China Express and Guangzhou Zhujiang
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By analyzing existing cross correlation between China Express Airlines and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on China Express and Guangzhou Zhujiang 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 China Express with a short position of Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Express and Guangzhou Zhujiang.
Diversification Opportunities for China Express and Guangzhou Zhujiang
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangzhou is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding China Express Airlines and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang and China Express 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 China Express Airlines are associated (or correlated) with Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of China Express i.e., China Express and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between China Express and Guangzhou Zhujiang
Assuming the 90 days trading horizon China Express Airlines is expected to under-perform the Guangzhou Zhujiang. In addition to that, China Express is 1.56 times more volatile than Guangzhou Zhujiang Brewery. It trades about -0.17 of its total potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about -0.01 per unit of volatility. If you would invest 910.00 in Guangzhou Zhujiang Brewery on September 12, 2024 and sell it today you would lose (4.00) from holding Guangzhou Zhujiang Brewery or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Express Airlines vs. Guangzhou Zhujiang Brewery
Performance |
| Timeline |
| China Express Airlines |
| Guangzhou Zhujiang |
China Express and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Express and Guangzhou Zhujiang
The main advantage of trading using opposite China Express and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Express position performs unexpectedly, Guangzhou Zhujiang 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 Guangzhou Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.| China Express vs. Agricultural Bank of | China Express vs. Industrial and Commercial | China Express vs. Bank of China | China Express vs. PetroChina Co Ltd |
| Guangzhou Zhujiang vs. China Petroleum Chemical | Guangzhou Zhujiang vs. PetroChina Co Ltd | Guangzhou Zhujiang vs. China State Construction | Guangzhou Zhujiang vs. China Railway 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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