Correlation Between China Railway and GOODTECH ASA
Can any of the company-specific risk be diversified away by investing in both China Railway and GOODTECH ASA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Railway and GOODTECH ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Railway Construction and GOODTECH ASA A, you can compare the effects of market volatilities on China Railway and GOODTECH ASA 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 China Railway with a short position of GOODTECH ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and GOODTECH ASA.
Diversification Opportunities for China Railway and GOODTECH ASA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and GOODTECH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A and China Railway 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 China Railway Construction are associated (or correlated) with GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of China Railway i.e., China Railway and GOODTECH ASA go up and down completely randomly.
Pair Corralation between China Railway and GOODTECH ASA
If you would invest 53.00 in China Railway Construction on August 31, 2024 and sell it today you would earn a total of 11.00 from holding China Railway Construction or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
China Railway Construction vs. GOODTECH ASA A
Performance |
| Timeline |
| China Railway Constr |
| GOODTECH ASA A |
China Railway and GOODTECH ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and GOODTECH ASA
The main advantage of trading using opposite China Railway and GOODTECH ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, GOODTECH ASA 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 GOODTECH ASA will offset losses from the drop in GOODTECH ASA's long position.| China Railway vs. CPU SOFTWAREHOUSE | China Railway vs. Magic Software Enterprises | China Railway vs. Japan Medical Dynamic | China Railway vs. Compugroup Medical SE |
| GOODTECH ASA vs. Take Two Interactive Software | GOODTECH ASA vs. FORMPIPE SOFTWARE AB | GOODTECH ASA vs. Verizon Communications | GOODTECH ASA vs. Rogers 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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