Correlation Between China Railway and Great Sun
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By analyzing existing cross correlation between China Railway Construction and Great Sun Foods Co, you can compare the effects of market volatilities on China Railway and Great Sun 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 Great Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Great Sun.
Diversification Opportunities for China Railway and Great Sun
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Great is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Great Sun Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Sun Foods 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 Great Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Sun Foods has no effect on the direction of China Railway i.e., China Railway and Great Sun go up and down completely randomly.
Pair Corralation between China Railway and Great Sun
Assuming the 90 days trading horizon China Railway Construction is expected to under-perform the Great Sun. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Construction is 2.87 times less risky than Great Sun. The stock trades about -0.36 of its potential returns per unit of risk. The Great Sun Foods Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 454.00 in Great Sun Foods Co on October 23, 2024 and sell it today you would lose (1.00) from holding Great Sun Foods Co or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
China Railway Construction vs. Great Sun Foods Co
Performance |
| Timeline |
| China Railway Constr |
| Great Sun Foods |
China Railway and Great Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Great Sun
The main advantage of trading using opposite China Railway and Great Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Great Sun 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 Great Sun will offset losses from the drop in Great Sun's long position.| China Railway vs. Ye Chiu Metal | China Railway vs. Western Metal Materials | China Railway vs. CITIC Metal Co | China Railway vs. Anhui Jinhe Industrial |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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