Correlation Between China Railway and Xian International
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By analyzing existing cross correlation between China Railway Group and Xian International Medical, you can compare the effects of market volatilities on China Railway and Xian International 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 Xian International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Xian International.
Diversification Opportunities for China Railway and Xian International
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Xian is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Xian International Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xian International 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 Group are associated (or correlated) with Xian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xian International has no effect on the direction of China Railway i.e., China Railway and Xian International go up and down completely randomly.
Pair Corralation between China Railway and Xian International
Assuming the 90 days trading horizon China Railway Group is expected to generate 0.82 times more return on investment than Xian International. However, China Railway Group is 1.21 times less risky than Xian International. It trades about -0.02 of its potential returns per unit of risk. Xian International Medical is currently generating about -0.03 per unit of risk. If you would invest 794.00 in China Railway Group on September 1, 2024 and sell it today you would lose (153.00) from holding China Railway Group or give up 19.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Xian International Medical
Performance |
| Timeline |
| China Railway Group |
| Xian International |
China Railway and Xian International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Xian International
The main advantage of trading using opposite China Railway and Xian International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Xian International 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 Xian International will offset losses from the drop in Xian International's long position.| China Railway vs. Shanghai Jinfeng Wine | China Railway vs. Changchun Engley Automobile | China Railway vs. Haima Automobile Group | China Railway vs. Xinjiang Communications Construction |
| Xian International vs. Bank of China | Xian International vs. Kweichow Moutai Co | Xian International vs. PetroChina Co Ltd | Xian International vs. Bank of Communications |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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