Correlation Between China Railway and Wonders Information
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By analyzing existing cross correlation between China Railway Group and Wonders Information, you can compare the effects of market volatilities on China Railway and Wonders 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 Wonders Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Wonders Information.
Diversification Opportunities for China Railway and Wonders Information
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Wonders is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Wonders Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonders Information 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 Wonders Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonders Information has no effect on the direction of China Railway i.e., China Railway and Wonders Information go up and down completely randomly.
Pair Corralation between China Railway and Wonders Information
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Wonders Information. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 2.94 times less risky than Wonders Information. The stock trades about -0.02 of its potential returns per unit of risk. The Wonders Information is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 754.00 in Wonders Information on September 3, 2024 and sell it today you would earn a total of 189.00 from holding Wonders Information or generate 25.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Wonders Information
Performance |
| Timeline |
| China Railway Group |
| Wonders Information |
China Railway and Wonders Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Wonders Information
The main advantage of trading using opposite China Railway and Wonders Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Wonders 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 Wonders Information will offset losses from the drop in Wonders Information's long position.| China Railway vs. Zhongtong Guomai Communication | China Railway vs. Ningbo Homelink Eco iTech | China Railway vs. Wuhan Yangtze Communication | China Railway vs. Railway Signal Communication |
| Wonders Information vs. Agricultural Bank of | Wonders Information vs. China Construction Bank | Wonders Information vs. Postal Savings Bank | Wonders Information 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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