Correlation Between China Railway and Yuan Longping
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By analyzing existing cross correlation between China Railway Construction and Yuan Longping High tech, you can compare the effects of market volatilities on China Railway and Yuan Longping 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 Yuan Longping. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Yuan Longping.
Diversification Opportunities for China Railway and Yuan Longping
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Yuan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Yuan Longping High tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan Longping High 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 Yuan Longping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan Longping High has no effect on the direction of China Railway i.e., China Railway and Yuan Longping go up and down completely randomly.
Pair Corralation between China Railway and Yuan Longping
Assuming the 90 days trading horizon China Railway Construction is expected to under-perform the Yuan Longping. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Construction is 2.26 times less risky than Yuan Longping. The stock trades about -0.3 of its potential returns per unit of risk. The Yuan Longping High tech is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 1,099 in Yuan Longping High tech on October 9, 2024 and sell it today you would lose (77.00) from holding Yuan Longping High tech or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Construction vs. Yuan Longping High tech
Performance |
| Timeline |
| China Railway Constr |
| Yuan Longping High |
China Railway and Yuan Longping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Yuan Longping
The main advantage of trading using opposite China Railway and Yuan Longping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Yuan Longping 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 Yuan Longping will offset losses from the drop in Yuan Longping's long position.| China Railway vs. Agricultural Bank of | China Railway vs. Industrial and Commercial | China Railway vs. Bank of China | China Railway vs. PetroChina Co Ltd |
| Yuan Longping vs. China Sports Industry | Yuan Longping vs. Vanfund Urban Investment | Yuan Longping vs. Sichuan Fulin Transportation | Yuan Longping vs. Jointo Energy Investment |
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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