Correlation Between 159681 and China National
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By analyzing existing cross correlation between 159681 and China National Software, you can compare the effects of market volatilities on 159681 and China National 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 159681 with a short position of China National. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and China National.
Diversification Opportunities for 159681 and China National
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 159681 and China is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and China National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software and 159681 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 159681 are associated (or correlated) with China National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of 159681 i.e., 159681 and China National go up and down completely randomly.
Pair Corralation between 159681 and China National
Assuming the 90 days trading horizon 159681 is expected to generate 8.0 times less return on investment than China National. But when comparing it to its historical volatility, 159681 is 2.17 times less risky than China National. It trades about 0.05 of its potential returns per unit of risk. China National Software is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,597 in China National Software on September 3, 2024 and sell it today you would earn a total of 949.00 from holding China National Software or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
159681 vs. China National Software
Performance |
| Timeline |
| 159681 |
| China National Software |
159681 and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159681 and China National
The main advantage of trading using opposite 159681 and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 position performs unexpectedly, China National 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 National will offset losses from the drop in China National's long position.The idea behind 159681 and China National Software pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| China National vs. Shandong Hi Speed RoadBridge | China National vs. Huatian Hotel Group | China National vs. Jiangsu Broadcasting Cable | China National vs. Glodon Software 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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