Correlation Between Renxin New and Railway Signal
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By analyzing existing cross correlation between Renxin New Material and Railway Signal Communication, you can compare the effects of market volatilities on Renxin New and Railway Signal 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 Renxin New with a short position of Railway Signal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renxin New and Railway Signal.
Diversification Opportunities for Renxin New and Railway Signal
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Renxin and Railway is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Renxin New Material and Railway Signal Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Railway Signal Commu and Renxin New 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 Renxin New Material are associated (or correlated) with Railway Signal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Railway Signal Commu has no effect on the direction of Renxin New i.e., Renxin New and Railway Signal go up and down completely randomly.
Pair Corralation between Renxin New and Railway Signal
Assuming the 90 days trading horizon Renxin New is expected to generate 3.76 times less return on investment than Railway Signal. In addition to that, Renxin New is 1.31 times more volatile than Railway Signal Communication. It trades about 0.01 of its total potential returns per unit of risk. Railway Signal Communication is currently generating about 0.07 per unit of volatility. If you would invest 443.00 in Railway Signal Communication on September 4, 2024 and sell it today you would earn a total of 200.00 from holding Railway Signal Communication or generate 45.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renxin New Material vs. Railway Signal Communication
Performance |
| Timeline |
| Renxin New Material |
| Railway Signal Commu |
Renxin New and Railway Signal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renxin New and Railway Signal
The main advantage of trading using opposite Renxin New and Railway Signal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renxin New position performs unexpectedly, Railway Signal 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 Railway Signal will offset losses from the drop in Railway Signal's long position.| Renxin New vs. Zijin Mining Group | Renxin New vs. Wanhua Chemical Group | Renxin New vs. Baoshan Iron Steel | Renxin New vs. Shandong Gold Mining |
| Railway Signal vs. Kweichow Moutai Co | Railway Signal vs. NAURA Technology Group | Railway Signal vs. Zhejiang Orient Gene | Railway Signal vs. APT Medical |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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