Correlation Between China Railway and Guangdong Wens
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By analyzing existing cross correlation between China Railway Group and Guangdong Wens Foodstuff, you can compare the effects of market volatilities on China Railway and Guangdong Wens 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 Guangdong Wens. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Guangdong Wens.
Diversification Opportunities for China Railway and Guangdong Wens
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Guangdong is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Guangdong Wens Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Wens Foodstuff 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 Guangdong Wens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Wens Foodstuff has no effect on the direction of China Railway i.e., China Railway and Guangdong Wens go up and down completely randomly.
Pair Corralation between China Railway and Guangdong Wens
Assuming the 90 days trading horizon China Railway Group is expected to generate 0.94 times more return on investment than Guangdong Wens. However, China Railway Group is 1.06 times less risky than Guangdong Wens. It trades about -0.01 of its potential returns per unit of risk. Guangdong Wens Foodstuff is currently generating about -0.02 per unit of risk. If you would invest 645.00 in China Railway Group on December 2, 2024 and sell it today you would lose (54.00) from holding China Railway Group or give up 8.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Guangdong Wens Foodstuff
Performance |
| Timeline |
| China Railway Group |
| Guangdong Wens Foodstuff |
China Railway and Guangdong Wens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Guangdong Wens
The main advantage of trading using opposite China Railway and Guangdong Wens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Guangdong Wens 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 Guangdong Wens will offset losses from the drop in Guangdong Wens' long position.| China Railway vs. Fiberhome Telecommunication Technologies | China Railway vs. Zhangjiagang Elegant Home | China Railway vs. Ziel Home Furnishing | China Railway vs. UE Furniture Co |
| Guangdong Wens vs. Montage Technology Co | Guangdong Wens vs. Anhui Deli Household | Guangdong Wens vs. Bohai Leasing Co | Guangdong Wens vs. Jahen Household Products |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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