Correlation Between Gifore Agricultural and China Railway
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By analyzing existing cross correlation between Gifore Agricultural Machinery and China Railway Construction, you can compare the effects of market volatilities on Gifore Agricultural 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 Gifore Agricultural with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gifore Agricultural and China Railway.
Diversification Opportunities for Gifore Agricultural and China Railway
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gifore and China is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gifore Agricultural Machinery 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 Gifore Agricultural 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 Gifore Agricultural Machinery 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 Gifore Agricultural i.e., Gifore Agricultural and China Railway go up and down completely randomly.
Pair Corralation between Gifore Agricultural and China Railway
Assuming the 90 days trading horizon Gifore Agricultural Machinery is expected to generate 2.86 times more return on investment than China Railway. However, Gifore Agricultural is 2.86 times more volatile than China Railway Construction. It trades about 0.18 of its potential returns per unit of risk. China Railway Construction is currently generating about -0.19 per unit of risk. If you would invest 488.00 in Gifore Agricultural Machinery on September 29, 2024 and sell it today you would earn a total of 71.00 from holding Gifore Agricultural Machinery or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gifore Agricultural Machinery vs. China Railway Construction
Performance |
| Timeline |
| Gifore Agricultural |
| China Railway Constr |
Gifore Agricultural and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gifore Agricultural and China Railway
The main advantage of trading using opposite Gifore Agricultural and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gifore Agricultural 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.| Gifore Agricultural vs. Sinomach Automobile Co | Gifore Agricultural vs. Uroica Mining Safety | Gifore Agricultural vs. Shanghai Yanpu Metal | Gifore Agricultural vs. Hainan Mining Co |
| China Railway vs. Bank of China | China Railway vs. Kweichow Moutai Co | China Railway vs. PetroChina Co Ltd | China Railway vs. Bank of Communications |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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