Correlation Between State Grid and China National
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By analyzing existing cross correlation between State Grid InformationCommunication and China National Software, you can compare the effects of market volatilities on State Grid and China National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and China National.
Diversification Opportunities for State Grid and China National
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between State and China is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and China National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of State Grid i.e., State Grid and China National go up and down completely randomly.
Pair Corralation between State Grid and China National
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to generate 0.62 times more return on investment than China National. However, State Grid InformationCommunication is 1.62 times less risky than China National. It trades about -0.25 of its potential returns per unit of risk. China National Software is currently generating about -0.21 per unit of risk. If you would invest 1,954 in State Grid InformationCommunication on October 29, 2024 and sell it today you would lose (174.00) from holding State Grid InformationCommunication or give up 8.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. China National Software
Performance |
| Timeline |
| State Grid Informati |
| China National Software |
State Grid and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and China National
The main advantage of trading using opposite State Grid and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, China National 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 National will offset losses from the drop in China National's long position.| State Grid vs. Ningbo MedicalSystem Biotechnology | State Grid vs. Marssenger Kitchenware Co | State Grid vs. Yindu Kitchen Equipment | State Grid vs. Shandong Sinoglory Health |
| China National vs. Shandong Hi Speed RoadBridge | China National vs. Hubeiyichang Transportation Group | China National vs. Wuxi Xuelang Environmental | China National vs. Chengdu Xinzhu RoadBridge |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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