Correlation Between China Railway and Yili Chuanning
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By analyzing existing cross correlation between China Railway Group and Yili Chuanning Biotechnology, you can compare the effects of market volatilities on China Railway and Yili Chuanning 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 Yili Chuanning. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Yili Chuanning.
Diversification Opportunities for China Railway and Yili Chuanning
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Yili is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Yili Chuanning Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yili Chuanning Biote 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 Yili Chuanning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yili Chuanning Biote has no effect on the direction of China Railway i.e., China Railway and Yili Chuanning go up and down completely randomly.
Pair Corralation between China Railway and Yili Chuanning
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Yili Chuanning. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 1.3 times less risky than Yili Chuanning. The stock trades about -0.36 of its potential returns per unit of risk. The Yili Chuanning Biotechnology is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,221 in Yili Chuanning Biotechnology on October 29, 2024 and sell it today you would lose (13.00) from holding Yili Chuanning Biotechnology or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Yili Chuanning Biotechnology
Performance |
| Timeline |
| China Railway Group |
| Yili Chuanning Biote |
China Railway and Yili Chuanning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Yili Chuanning
The main advantage of trading using opposite China Railway and Yili Chuanning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Yili Chuanning 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 Yili Chuanning will offset losses from the drop in Yili Chuanning's long position.| China Railway vs. Dazhong Transportation Group | China Railway vs. Yili Chuanning Biotechnology | China Railway vs. Heilongjiang Transport Development | China Railway vs. Shandong Hi Speed RoadBridge |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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