Correlation Between State Grid and China World
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By analyzing existing cross correlation between State Grid InformationCommunication and China World Trade, you can compare the effects of market volatilities on State Grid and China World 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 State Grid with a short position of China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and China World.
Diversification Opportunities for State Grid and China World
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and China is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade and State Grid 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 State Grid InformationCommunication are associated (or correlated) with China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of State Grid i.e., State Grid and China World go up and down completely randomly.
Pair Corralation between State Grid and China World
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to generate 2.93 times more return on investment than China World. However, State Grid is 2.93 times more volatile than China World Trade. It trades about 0.1 of its potential returns per unit of risk. China World Trade is currently generating about -0.05 per unit of risk. 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 |
State Grid InformationCommunic vs. China World Trade
Performance |
| Timeline |
| State Grid Informati |
| China World Trade |
State Grid and China World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and China World
The main advantage of trading using opposite State Grid and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, China World 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 World will offset losses from the drop in China World's long position.| State Grid vs. Guangdong Jingyi Metal | State Grid vs. Ye Chiu Metal | State Grid vs. Qinghaihuading Industrial Co | State Grid vs. Qijing Machinery |
| China World vs. Industrial and Commercial | China World vs. China Construction Bank | China World vs. Bank of China | China World vs. Agricultural Bank of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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