Correlation Between Chengdu B and Railway Signal
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By analyzing existing cross correlation between Chengdu B ray Media and Railway Signal Communication, you can compare the effects of market volatilities on Chengdu B 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 Chengdu B with a short position of Railway Signal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu B and Railway Signal.
Diversification Opportunities for Chengdu B and Railway Signal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Railway is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu B ray Media 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 Chengdu B 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 Chengdu B ray Media 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 Chengdu B i.e., Chengdu B and Railway Signal go up and down completely randomly.
Pair Corralation between Chengdu B and Railway Signal
Assuming the 90 days trading horizon Chengdu B ray Media is expected to generate 1.45 times more return on investment than Railway Signal. However, Chengdu B is 1.45 times more volatile than Railway Signal Communication. It trades about 0.23 of its potential returns per unit of risk. Railway Signal Communication is currently generating about 0.04 per unit of risk. If you would invest 448.00 in Chengdu B ray Media on September 4, 2024 and sell it today you would earn a total of 61.00 from holding Chengdu B ray Media or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu B ray Media vs. Railway Signal Communication
Performance |
| Timeline |
| Chengdu B ray |
| Railway Signal Commu |
Chengdu B and Railway Signal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu B and Railway Signal
The main advantage of trading using opposite Chengdu B and Railway Signal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu B 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.| Chengdu B vs. Aofu Environmental Technology | Chengdu B vs. GreenTech Environmental Co | Chengdu B vs. Cofoe Medical Technology | Chengdu B vs. Cowealth Medical China |
| Railway Signal vs. Kweichow Moutai Co | Railway Signal vs. NAURA Technology Group | Railway Signal vs. Zhejiang Orient Gene | Railway Signal vs. APT Medical |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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