Correlation Between Penyao Environmental and China Railway
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By analyzing existing cross correlation between Penyao Environmental Protection and China Railway Construction, you can compare the effects of market volatilities on Penyao Environmental 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 Penyao Environmental with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penyao Environmental and China Railway.
Diversification Opportunities for Penyao Environmental and China Railway
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Penyao and China is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Penyao Environmental Protectio 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 Penyao Environmental 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 Penyao Environmental Protection 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 Penyao Environmental i.e., Penyao Environmental and China Railway go up and down completely randomly.
Pair Corralation between Penyao Environmental and China Railway
Assuming the 90 days trading horizon Penyao Environmental Protection is expected to generate 2.42 times more return on investment than China Railway. However, Penyao Environmental is 2.42 times more volatile than China Railway Construction. It trades about -0.16 of its potential returns per unit of risk. China Railway Construction is currently generating about -0.48 per unit of risk. If you would invest 590.00 in Penyao Environmental Protection on October 9, 2024 and sell it today you would lose (64.00) from holding Penyao Environmental Protection or give up 10.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penyao Environmental Protectio vs. China Railway Construction
Performance |
| Timeline |
| Penyao Environmental |
| China Railway Constr |
Penyao Environmental and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penyao Environmental and China Railway
The main advantage of trading using opposite Penyao Environmental and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penyao Environmental 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.| Penyao Environmental vs. Hunan Mendale Hometextile | Penyao Environmental vs. UE Furniture Co | Penyao Environmental vs. Oppein Home Group | Penyao Environmental vs. Suzhou Oriental Semiconductor |
| China Railway vs. Hefei Metalforming Mach | China Railway vs. Shandong Hongchuang Aluminum | China Railway vs. Zhejiang Yongjin Metal | China Railway vs. Sino Platinum Metals 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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