Correlation Between Hubei Dinglong and China Railway
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By analyzing existing cross correlation between Hubei Dinglong Chemical and China Railway Group, you can compare the effects of market volatilities on Hubei Dinglong 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 Hubei Dinglong with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Dinglong and China Railway.
Diversification Opportunities for Hubei Dinglong and China Railway
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hubei and China is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Dinglong Chemical and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group and Hubei Dinglong 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 Hubei Dinglong Chemical 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 Group has no effect on the direction of Hubei Dinglong i.e., Hubei Dinglong and China Railway go up and down completely randomly.
Pair Corralation between Hubei Dinglong and China Railway
Assuming the 90 days trading horizon Hubei Dinglong Chemical is expected to generate 1.37 times more return on investment than China Railway. However, Hubei Dinglong is 1.37 times more volatile than China Railway Group. It trades about -0.17 of its potential returns per unit of risk. China Railway Group is currently generating about -0.41 per unit of risk. If you would invest 2,736 in Hubei Dinglong Chemical on October 13, 2024 and sell it today you would lose (196.00) from holding Hubei Dinglong Chemical or give up 7.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Dinglong Chemical vs. China Railway Group
Performance |
| Timeline |
| Hubei Dinglong Chemical |
| China Railway Group |
Hubei Dinglong and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Dinglong and China Railway
The main advantage of trading using opposite Hubei Dinglong and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Dinglong 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.| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Wanhua Chemical Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining |
| China Railway vs. Hefei Metalforming Mach | China Railway vs. State Grid InformationCommunication | China Railway vs. ZYF Lopsking Aluminum | China Railway vs. Unisplendour Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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