Correlation Between China World and Elite Color
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By analyzing existing cross correlation between China World Trade and Elite Color Environmental, you can compare the effects of market volatilities on China World and Elite Color 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 World with a short position of Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Elite Color.
Diversification Opportunities for China World and Elite Color
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Elite is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental and China World 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 World Trade are associated (or correlated) with Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of China World i.e., China World and Elite Color go up and down completely randomly.
Pair Corralation between China World and Elite Color
Assuming the 90 days trading horizon China World Trade is expected to under-perform the Elite Color. But the stock apears to be less risky and, when comparing its historical volatility, China World Trade is 2.49 times less risky than Elite Color. The stock trades about -0.05 of its potential returns per unit of risk. The Elite Color Environmental is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 611.00 in Elite Color Environmental on September 3, 2024 and sell it today you would earn a total of 64.00 from holding Elite Color Environmental or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. Elite Color Environmental
Performance |
| Timeline |
| China World Trade |
| Elite Color Environmental |
China World and Elite Color Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and Elite Color
The main advantage of trading using opposite China World and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color's long position.| China World vs. Industrial and Commercial | China World vs. China Construction Bank | China World vs. Bank of China | China World vs. Agricultural Bank of |
| Elite Color vs. Zijin Mining Group | Elite Color vs. Baoshan Iron Steel | Elite Color vs. Rongsheng Petrochemical Co | Elite Color vs. Hoshine Silicon Ind |
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 Stocks Directory module to find actively traded stocks across global markets.
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