Correlation Between China United and China Everbright
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By analyzing existing cross correlation between China United Network and China Everbright Bank, you can compare the effects of market volatilities on China United and China Everbright 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 United with a short position of China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of China United and China Everbright.
Diversification Opportunities for China United and China Everbright
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and China is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding China United Network and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank and China United 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 United Network are associated (or correlated) with China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of China United i.e., China United and China Everbright go up and down completely randomly.
Pair Corralation between China United and China Everbright
Assuming the 90 days trading horizon China United is expected to generate 1.34 times less return on investment than China Everbright. In addition to that, China United is 1.37 times more volatile than China Everbright Bank. It trades about 0.08 of its total potential returns per unit of risk. China Everbright Bank is currently generating about 0.15 per unit of volatility. If you would invest 307.00 in China Everbright Bank on September 2, 2024 and sell it today you would earn a total of 53.00 from holding China Everbright Bank or generate 17.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China United Network vs. China Everbright Bank
Performance |
| Timeline |
| China United Network |
| China Everbright Bank |
China United and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China United and China Everbright
The main advantage of trading using opposite China United and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China United position performs unexpectedly, China Everbright 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 Everbright will offset losses from the drop in China Everbright's long position.| China United vs. China Everbright Bank | China United vs. Shandong Sinoglory Health | China United vs. Nancal Energy Saving Tech | China United vs. Shanghai Rongtai Health |
| China Everbright vs. Kweichow Moutai Co | China Everbright vs. Shenzhen Mindray Bio Medical | China Everbright vs. Jiangsu Pacific Quartz | China Everbright vs. G bits Network Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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