Correlation Between China Railway and ZJBC Information
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By analyzing existing cross correlation between China Railway Group and ZJBC Information Technology, you can compare the effects of market volatilities on China Railway and ZJBC Information 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 ZJBC Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and ZJBC Information.
Diversification Opportunities for China Railway and ZJBC Information
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and ZJBC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and ZJBC Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZJBC Information Tec 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 ZJBC Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZJBC Information Tec has no effect on the direction of China Railway i.e., China Railway and ZJBC Information go up and down completely randomly.
Pair Corralation between China Railway and ZJBC Information
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the ZJBC Information. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 1.22 times less risky than ZJBC Information. The stock trades about -0.05 of its potential returns per unit of risk. The ZJBC Information Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 217.00 in ZJBC Information Technology on August 28, 2024 and sell it today you would earn a total of 11.00 from holding ZJBC Information Technology or generate 5.07% 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. ZJBC Information Technology
Performance |
| Timeline |
| China Railway Group |
| ZJBC Information Tec |
China Railway and ZJBC Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and ZJBC Information
The main advantage of trading using opposite China Railway and ZJBC Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, ZJBC Information 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 ZJBC Information will offset losses from the drop in ZJBC Information's 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 |
| ZJBC Information vs. China Petroleum Chemical | ZJBC Information vs. PetroChina Co Ltd | ZJBC Information vs. China State Construction | ZJBC Information 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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