Correlation Between China Railway and Nuode Investment
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By analyzing existing cross correlation between China Railway Group and Nuode Investment Co, you can compare the effects of market volatilities on China Railway and Nuode Investment 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 Nuode Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Nuode Investment.
Diversification Opportunities for China Railway and Nuode Investment
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Nuode is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Nuode Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuode Investment 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 Nuode Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuode Investment has no effect on the direction of China Railway i.e., China Railway and Nuode Investment go up and down completely randomly.
Pair Corralation between China Railway and Nuode Investment
Assuming the 90 days trading horizon China Railway Group is expected to generate 0.72 times more return on investment than Nuode Investment. However, China Railway Group is 1.38 times less risky than Nuode Investment. It trades about -0.35 of its potential returns per unit of risk. Nuode Investment Co is currently generating about -0.45 per unit of risk. If you would invest 659.00 in China Railway Group on October 11, 2024 and sell it today you would lose (68.00) from holding China Railway Group or give up 10.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Nuode Investment Co
Performance |
| Timeline |
| China Railway Group |
| Nuode Investment |
China Railway and Nuode Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Nuode Investment
The main advantage of trading using opposite China Railway and Nuode Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Nuode Investment 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 Nuode Investment will offset losses from the drop in Nuode Investment's long position.| China Railway vs. RoadMain T Co | China Railway vs. Jiangsu Broadcasting Cable | China Railway vs. Shanghai Broadband Technology | China Railway vs. Anhui Transport Consulting |
| Nuode Investment vs. China Petroleum Chemical | Nuode Investment vs. PetroChina Co Ltd | Nuode Investment vs. China State Construction | Nuode Investment vs. China Railway Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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