Correlation Between China World and State Grid
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By analyzing existing cross correlation between China World Trade and State Grid InformationCommunication, you can compare the effects of market volatilities on China World and State Grid 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 State Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and State Grid.
Diversification Opportunities for China World and State Grid
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and State is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and State Grid InformationCommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Grid Informati 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 State Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Grid Informati has no effect on the direction of China World i.e., China World and State Grid go up and down completely randomly.
Pair Corralation between China World and State Grid
Assuming the 90 days trading horizon China World Trade is expected to under-perform the State Grid. But the stock apears to be less risky and, when comparing its historical volatility, China World Trade is 2.93 times less risky than State Grid. The stock trades about -0.05 of its potential returns per unit of risk. The State Grid InformationCommunication is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,077 in State Grid InformationCommunication on September 3, 2024 and sell it today you would earn a total of 145.00 from holding State Grid InformationCommunication or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. State Grid InformationCommunic
Performance |
| Timeline |
| China World Trade |
| State Grid Informati |
China World and State Grid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and State Grid
The main advantage of trading using opposite China World and State Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, State Grid 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 State Grid will offset losses from the drop in State Grid'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 |
| State Grid vs. Guangdong Jingyi Metal | State Grid vs. Ye Chiu Metal | State Grid vs. Qinghaihuading Industrial Co | State Grid vs. Qijing Machinery |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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