Correlation Between China World and China Enterprise
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By analyzing existing cross correlation between China World Trade and China Enterprise Co, you can compare the effects of market volatilities on China World and China Enterprise 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 China Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and China Enterprise.
Diversification Opportunities for China World and China Enterprise
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and China is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and China Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Enterprise 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 China Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Enterprise has no effect on the direction of China World i.e., China World and China Enterprise go up and down completely randomly.
Pair Corralation between China World and China Enterprise
Assuming the 90 days trading horizon China World Trade is expected to generate 0.67 times more return on investment than China Enterprise. However, China World Trade is 1.5 times less risky than China Enterprise. It trades about -0.18 of its potential returns per unit of risk. China Enterprise Co is currently generating about -0.54 per unit of risk. If you would invest 2,431 in China World Trade on October 16, 2024 and sell it today you would lose (104.00) from holding China World Trade or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. China Enterprise Co
Performance |
| Timeline |
| China World Trade |
| China Enterprise |
China World and China Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and China Enterprise
The main advantage of trading using opposite China World and China Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, China Enterprise 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 Enterprise will offset losses from the drop in China Enterprise's long position.| China World vs. Liuzhou Chemical Industry | China World vs. ROPEOK Technology Group | China World vs. HeBei Jinniu Chemical | China World vs. Hubei Forbon Technology |
| China Enterprise vs. Hengdian Entertainment Co | China Enterprise vs. Southern PublishingMedia Co | China Enterprise vs. Heilongjiang Publishing Media | China Enterprise vs. Mango Excellent Media |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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