Correlation Between China National and GreenTech Environmental
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By analyzing existing cross correlation between China National Software and GreenTech Environmental Co, you can compare the effects of market volatilities on China National and GreenTech Environmental 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 GreenTech Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and GreenTech Environmental.
Diversification Opportunities for China National and GreenTech Environmental
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and GreenTech is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China National Software and GreenTech Environmental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTech Environmental 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 GreenTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTech Environmental has no effect on the direction of China National i.e., China National and GreenTech Environmental go up and down completely randomly.
Pair Corralation between China National and GreenTech Environmental
Assuming the 90 days trading horizon China National Software is expected to under-perform the GreenTech Environmental. In addition to that, China National is 1.24 times more volatile than GreenTech Environmental Co. It trades about -0.24 of its total potential returns per unit of risk. GreenTech Environmental Co is currently generating about -0.17 per unit of volatility. If you would invest 1,596 in GreenTech Environmental Co on October 30, 2024 and sell it today you would lose (211.00) from holding GreenTech Environmental Co or give up 13.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China National Software vs. GreenTech Environmental Co
Performance |
| Timeline |
| China National Software |
| GreenTech Environmental |
China National and GreenTech Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China National and GreenTech Environmental
The main advantage of trading using opposite China National and GreenTech Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, GreenTech Environmental 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 GreenTech Environmental will offset losses from the drop in GreenTech Environmental's long position.| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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