Correlation Between China Railway and Xiwang Foodstuffs
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By analyzing existing cross correlation between China Railway Group and Xiwang Foodstuffs Co, you can compare the effects of market volatilities on China Railway and Xiwang Foodstuffs 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 Xiwang Foodstuffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Xiwang Foodstuffs.
Diversification Opportunities for China Railway and Xiwang Foodstuffs
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Xiwang is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Xiwang Foodstuffs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Foodstuffs 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 Xiwang Foodstuffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Foodstuffs has no effect on the direction of China Railway i.e., China Railway and Xiwang Foodstuffs go up and down completely randomly.
Pair Corralation between China Railway and Xiwang Foodstuffs
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Xiwang Foodstuffs. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 2.9 times less risky than Xiwang Foodstuffs. The stock trades about -0.05 of its potential returns per unit of risk. The Xiwang Foodstuffs Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 315.00 in Xiwang Foodstuffs Co on August 28, 2024 and sell it today you would earn a total of 59.00 from holding Xiwang Foodstuffs Co or generate 18.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Xiwang Foodstuffs Co
Performance |
| Timeline |
| China Railway Group |
| Xiwang Foodstuffs |
China Railway and Xiwang Foodstuffs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Xiwang Foodstuffs
The main advantage of trading using opposite China Railway and Xiwang Foodstuffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Xiwang Foodstuffs 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 Xiwang Foodstuffs will offset losses from the drop in Xiwang Foodstuffs' long position.| China Railway vs. CICT Mobile Communication | China Railway vs. Spring Airlines Co | China Railway vs. Railway Signal Communication | China Railway vs. 360 Security Technology |
| Xiwang Foodstuffs vs. China Petroleum Chemical | Xiwang Foodstuffs vs. PetroChina Co Ltd | Xiwang Foodstuffs vs. China State Construction | Xiwang Foodstuffs vs. China Railway Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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