Correlation Between China Railway and Chongqing Brewery
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By analyzing existing cross correlation between China Railway Group and Chongqing Brewery Co, you can compare the effects of market volatilities on China Railway and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Chongqing Brewery.
Diversification Opportunities for China Railway and Chongqing Brewery
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Chongqing is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of China Railway i.e., China Railway and Chongqing Brewery go up and down completely randomly.
Pair Corralation between China Railway and Chongqing Brewery
Assuming the 90 days trading horizon China Railway is expected to generate 1.04 times less return on investment than Chongqing Brewery. In addition to that, China Railway is 1.0 times more volatile than Chongqing Brewery Co. It trades about 0.08 of its total potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.08 per unit of volatility. If you would invest 5,433 in Chongqing Brewery Co on August 29, 2024 and sell it today you would earn a total of 649.00 from holding Chongqing Brewery Co or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Chongqing Brewery Co
Performance |
| Timeline |
| China Railway Group |
| Chongqing Brewery |
China Railway and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Chongqing Brewery
The main advantage of trading using opposite China Railway and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery'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 |
| Chongqing Brewery vs. PetroChina Co Ltd | Chongqing Brewery vs. China Mobile Limited | Chongqing Brewery vs. Ping An Insurance | Chongqing Brewery vs. China Petroleum Chemical |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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