Correlation Between China National and Chengdu Xinzhu
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By analyzing existing cross correlation between China National Software and Chengdu Xinzhu RoadBridge, you can compare the effects of market volatilities on China National and Chengdu Xinzhu 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 Chengdu Xinzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and Chengdu Xinzhu.
Diversification Opportunities for China National and Chengdu Xinzhu
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Chengdu is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding China National Software and Chengdu Xinzhu RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xinzhu RoadBridge 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 Chengdu Xinzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xinzhu RoadBridge has no effect on the direction of China National i.e., China National and Chengdu Xinzhu go up and down completely randomly.
Pair Corralation between China National and Chengdu Xinzhu
Assuming the 90 days trading horizon China National Software is expected to generate 1.9 times more return on investment than Chengdu Xinzhu. However, China National is 1.9 times more volatile than Chengdu Xinzhu RoadBridge. It trades about 0.26 of its potential returns per unit of risk. Chengdu Xinzhu RoadBridge is currently generating about 0.01 per unit of risk. If you would invest 4,117 in China National Software on August 25, 2024 and sell it today you would earn a total of 1,293 from holding China National Software or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China National Software vs. Chengdu Xinzhu RoadBridge
Performance |
| Timeline |
| China National Software |
| Chengdu Xinzhu RoadBridge |
China National and Chengdu Xinzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China National and Chengdu Xinzhu
The main advantage of trading using opposite China National and Chengdu Xinzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, Chengdu Xinzhu 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 Chengdu Xinzhu will offset losses from the drop in Chengdu Xinzhu's long position.| China National vs. Agricultural Bank of | China National vs. Industrial and Commercial | China National vs. Bank of China | China National vs. PetroChina Co Ltd |
| Chengdu Xinzhu vs. China National Software | Chengdu Xinzhu vs. Liaoning Chengda Biotechnology | Chengdu Xinzhu vs. Fujian Rongji Software | Chengdu Xinzhu vs. Eastern Air Logistics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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