Correlation Between China National and Blue Sail
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By analyzing existing cross correlation between China National Software and Blue Sail Medical, you can compare the effects of market volatilities on China National and Blue Sail 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 National with a short position of Blue Sail. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and Blue Sail.
Diversification Opportunities for China National and Blue Sail
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Blue is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China National Software and Blue Sail Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sail Medical and China National 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 National Software are associated (or correlated) with Blue Sail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sail Medical has no effect on the direction of China National i.e., China National and Blue Sail go up and down completely randomly.
Pair Corralation between China National and Blue Sail
Assuming the 90 days trading horizon China National Software is expected to generate 2.83 times more return on investment than Blue Sail. However, China National is 2.83 times more volatile than Blue Sail Medical. It trades about 0.18 of its potential returns per unit of risk. Blue Sail Medical is currently generating about -0.05 per unit of risk. If you would invest 4,260 in China National Software on August 29, 2024 and sell it today you would earn a total of 960.00 from holding China National Software or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China National Software vs. Blue Sail Medical
Performance |
| Timeline |
| China National Software |
| Blue Sail Medical |
China National and Blue Sail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China National and Blue Sail
The main advantage of trading using opposite China National and Blue Sail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, Blue Sail 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 Blue Sail will offset losses from the drop in Blue Sail's long position.| China National vs. China State Construction | China National vs. Huafa Industrial Co | China National vs. China International Capital | China National vs. Kweichow Moutai Co |
| Blue Sail vs. Industrial and Commercial | Blue Sail vs. China Construction Bank | Blue Sail vs. Agricultural Bank of | Blue Sail vs. Bank of China |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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