Correlation Between China Railway and Gansu Yasheng
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By analyzing existing cross correlation between China Railway Group and Gansu Yasheng Industrial, you can compare the effects of market volatilities on China Railway and Gansu Yasheng 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 Gansu Yasheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Gansu Yasheng.
Diversification Opportunities for China Railway and Gansu Yasheng
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Gansu is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Gansu Yasheng Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Yasheng Industrial 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 Gansu Yasheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Yasheng Industrial has no effect on the direction of China Railway i.e., China Railway and Gansu Yasheng go up and down completely randomly.
Pair Corralation between China Railway and Gansu Yasheng
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Gansu Yasheng. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 1.41 times less risky than Gansu Yasheng. The stock trades about -0.02 of its potential returns per unit of risk. The Gansu Yasheng Industrial is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 293.00 in Gansu Yasheng Industrial on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Gansu Yasheng Industrial or generate 10.58% 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. Gansu Yasheng Industrial
Performance |
| Timeline |
| China Railway Group |
| Gansu Yasheng Industrial |
China Railway and Gansu Yasheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Gansu Yasheng
The main advantage of trading using opposite China Railway and Gansu Yasheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Gansu Yasheng 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 Gansu Yasheng will offset losses from the drop in Gansu Yasheng's long position.| China Railway vs. Hangzhou Weiguang Electronic | China Railway vs. Fuzhou Rockchip Electronics | China Railway vs. YiDong Electronics Technology | China Railway vs. LianChuang Electronic Technology |
| Gansu Yasheng vs. New China Life | Gansu Yasheng vs. Ming Yang Smart | Gansu Yasheng vs. 159681 | Gansu Yasheng vs. 159005 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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