Correlation Between State Grid and Railway Signal
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By analyzing existing cross correlation between State Grid InformationCommunication and Railway Signal Communication, you can compare the effects of market volatilities on State Grid and Railway Signal 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 Railway Signal. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Railway Signal.
Diversification Opportunities for State Grid and Railway Signal
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between State and Railway is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Railway Signal Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Railway Signal Commu 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 Railway Signal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Railway Signal Commu has no effect on the direction of State Grid i.e., State Grid and Railway Signal go up and down completely randomly.
Pair Corralation between State Grid and Railway Signal
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to generate 0.96 times more return on investment than Railway Signal. However, State Grid InformationCommunication is 1.04 times less risky than Railway Signal. It trades about 0.16 of its potential returns per unit of risk. Railway Signal Communication is currently generating about 0.16 per unit of risk. If you would invest 1,699 in State Grid InformationCommunication on September 12, 2024 and sell it today you would earn a total of 549.00 from holding State Grid InformationCommunication or generate 32.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Railway Signal Communication
Performance |
| Timeline |
| State Grid Informati |
| Railway Signal Commu |
State Grid and Railway Signal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Railway Signal
The main advantage of trading using opposite State Grid and Railway Signal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Railway Signal 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 Railway Signal will offset losses from the drop in Railway Signal's long position.| State Grid vs. Industrial and Commercial | State Grid vs. Agricultural Bank of | State Grid vs. China Construction Bank | State Grid vs. Bank of China |
| Railway Signal vs. Ming Yang Smart | Railway Signal vs. 159681 | Railway Signal vs. 159005 | Railway Signal vs. Loctek Ergonomic 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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