Correlation Between China Railway and CNPC Capital
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By analyzing existing cross correlation between China Railway Construction and CNPC Capital Co, you can compare the effects of market volatilities on China Railway and CNPC Capital 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 Railway with a short position of CNPC Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and CNPC Capital.
Diversification Opportunities for China Railway and CNPC Capital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and CNPC is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and CNPC Capital Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNPC Capital and China Railway 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 Railway Construction are associated (or correlated) with CNPC Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNPC Capital has no effect on the direction of China Railway i.e., China Railway and CNPC Capital go up and down completely randomly.
Pair Corralation between China Railway and CNPC Capital
Assuming the 90 days trading horizon China Railway Construction is expected to generate 0.81 times more return on investment than CNPC Capital. However, China Railway Construction is 1.23 times less risky than CNPC Capital. It trades about 0.15 of its potential returns per unit of risk. CNPC Capital Co is currently generating about -0.06 per unit of risk. If you would invest 913.00 in China Railway Construction on September 27, 2024 and sell it today you would earn a total of 32.00 from holding China Railway Construction or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Railway Construction vs. CNPC Capital Co
Performance |
| Timeline |
| China Railway Constr |
| CNPC Capital |
China Railway and CNPC Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and CNPC Capital
The main advantage of trading using opposite China Railway and CNPC Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, CNPC Capital 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 CNPC Capital will offset losses from the drop in CNPC Capital's long position.| China Railway vs. Holitech Technology Co | China Railway vs. Xinjiang Baodi Mining | China Railway vs. Hoshine Silicon Ind | China Railway vs. Ningbo Thermal Power |
| CNPC Capital vs. Ming Yang Smart | CNPC Capital vs. 159681 | CNPC Capital vs. 159005 | CNPC Capital 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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