Correlation Between Elite Color and China Railway
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By analyzing existing cross correlation between Elite Color Environmental and China Railway Construction, you can compare the effects of market volatilities on Elite Color 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 Elite Color with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Color and China Railway.
Diversification Opportunities for Elite Color and China Railway
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elite and China is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Elite Color Environmental 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 Elite Color 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 Elite Color Environmental 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 Elite Color i.e., Elite Color and China Railway go up and down completely randomly.
Pair Corralation between Elite Color and China Railway
Assuming the 90 days trading horizon Elite Color Environmental is expected to generate 1.51 times more return on investment than China Railway. However, Elite Color is 1.51 times more volatile than China Railway Construction. It trades about 0.29 of its potential returns per unit of risk. China Railway Construction is currently generating about -0.18 per unit of risk. If you would invest 579.00 in Elite Color Environmental on November 4, 2024 and sell it today you would earn a total of 50.00 from holding Elite Color Environmental or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Color Environmental vs. China Railway Construction
Performance |
| Timeline |
| Elite Color Environmental |
| China Railway Constr |
Elite Color and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Color and China Railway
The main advantage of trading using opposite Elite Color and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Color 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.| Elite Color vs. State Grid InformationCommunication | Elite Color vs. Guangzhou Zhujiang Brewery | Elite Color vs. Allwin Telecommunication Co | Elite Color vs. Chongqing Brewery Co |
| China Railway vs. Shanghai Yanpu Metal | China Railway vs. Guangdong Jingyi Metal | China Railway vs. HMTNew Technical | China Railway vs. JCHX Mining Management |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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