Correlation Between China Railway and Guangzhou Shangpin
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By analyzing existing cross correlation between China Railway Group and Guangzhou Shangpin Home, you can compare the effects of market volatilities on China Railway and Guangzhou Shangpin 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 Guangzhou Shangpin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Guangzhou Shangpin.
Diversification Opportunities for China Railway and Guangzhou Shangpin
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Guangzhou is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Guangzhou Shangpin Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Shangpin Home 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 Guangzhou Shangpin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Shangpin Home has no effect on the direction of China Railway i.e., China Railway and Guangzhou Shangpin go up and down completely randomly.
Pair Corralation between China Railway and Guangzhou Shangpin
Assuming the 90 days trading horizon China Railway Group is expected to generate 0.59 times more return on investment than Guangzhou Shangpin. However, China Railway Group is 1.69 times less risky than Guangzhou Shangpin. It trades about 0.03 of its potential returns per unit of risk. Guangzhou Shangpin Home is currently generating about 0.0 per unit of risk. If you would invest 571.00 in China Railway Group on August 29, 2024 and sell it today you would earn a total of 67.00 from holding China Railway Group or generate 11.73% 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. Guangzhou Shangpin Home
Performance |
| Timeline |
| China Railway Group |
| Guangzhou Shangpin Home |
China Railway and Guangzhou Shangpin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Guangzhou Shangpin
The main advantage of trading using opposite China Railway and Guangzhou Shangpin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Guangzhou Shangpin 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 Guangzhou Shangpin will offset losses from the drop in Guangzhou Shangpin's long position.| China Railway vs. Hangzhou Gisway Information | China Railway vs. ButOne Information Corp | China Railway vs. Chinese Universe Publishing | China Railway vs. Zhejiang Publishing Media |
| Guangzhou Shangpin vs. Agricultural Bank of | Guangzhou Shangpin vs. Industrial and Commercial | Guangzhou Shangpin vs. Bank of China | Guangzhou Shangpin vs. China Construction Bank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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