Correlation Between China Railway and Xiamen CD
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By analyzing existing cross correlation between China Railway Group and Xiamen CD, you can compare the effects of market volatilities on China Railway and Xiamen CD 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 Xiamen CD. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Xiamen CD.
Diversification Opportunities for China Railway and Xiamen CD
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Xiamen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Xiamen CD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen CD 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 Xiamen CD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen CD has no effect on the direction of China Railway i.e., China Railway and Xiamen CD go up and down completely randomly.
Pair Corralation between China Railway and Xiamen CD
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Xiamen CD. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 1.01 times less risky than Xiamen CD. The stock trades about -0.04 of its potential returns per unit of risk. The Xiamen CD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,028 in Xiamen CD on January 24, 2025 and sell it today you would earn a total of 22.00 from holding Xiamen CD or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Xiamen CD
Performance |
| Timeline |
| China Railway Group |
| Xiamen CD |
China Railway and Xiamen CD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Xiamen CD
The main advantage of trading using opposite China Railway and Xiamen CD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Xiamen CD 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 Xiamen CD will offset losses from the drop in Xiamen CD's long position.| China Railway vs. Jilin Chemical Fibre | China Railway vs. Hengli Petrochemical Co | China Railway vs. North Chemical Industries | China Railway vs. Shanghai Phichem Material |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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