Correlation Between China Railway and Qingdao Foods
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By analyzing existing cross correlation between China Railway Group and Qingdao Foods Co, you can compare the effects of market volatilities on China Railway and Qingdao Foods 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 Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Qingdao Foods.
Diversification Opportunities for China Railway and Qingdao Foods
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Qingdao is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao 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 Group are associated (or correlated) with Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of China Railway i.e., China Railway and Qingdao Foods go up and down completely randomly.
Pair Corralation between China Railway and Qingdao Foods
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Qingdao Foods. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 1.18 times less risky than Qingdao Foods. The stock trades about -0.04 of its potential returns per unit of risk. The Qingdao Foods Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,510 in Qingdao Foods Co on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Qingdao Foods Co or generate 0.46% 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. Qingdao Foods Co
Performance |
| Timeline |
| China Railway Group |
| Qingdao Foods |
China Railway and Qingdao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Qingdao Foods
The main advantage of trading using opposite China Railway and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.| China Railway vs. Changchun BCHT Biotechnology | China Railway vs. Ningbo MedicalSystem Biotechnology | China Railway vs. Lander Sports Development | China Railway vs. Heilongjiang Publishing Media |
| Qingdao Foods vs. China Petroleum Chemical | Qingdao Foods vs. PetroChina Co Ltd | Qingdao Foods vs. China State Construction | Qingdao Foods 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 CEOs Directory module to screen CEOs from public companies around the world.
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