Correlation Between China Railway and Guangxi Wuzhou
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By analyzing existing cross correlation between China Railway Group and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on China Railway and Guangxi Wuzhou 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 Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Guangxi Wuzhou.
Diversification Opportunities for China Railway and Guangxi Wuzhou
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Guangxi is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu 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 Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of China Railway i.e., China Railway and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between China Railway and Guangxi Wuzhou
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Guangxi Wuzhou. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 3.6 times less risky than Guangxi Wuzhou. The stock trades about -0.24 of its potential returns per unit of risk. The Guangxi Wuzhou Communications is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 490.00 in Guangxi Wuzhou Communications on October 18, 2024 and sell it today you would lose (38.00) from holding Guangxi Wuzhou Communications or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Guangxi Wuzhou Communications
Performance |
| Timeline |
| China Railway Group |
| Guangxi Wuzhou Commu |
China Railway and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Guangxi Wuzhou
The main advantage of trading using opposite China Railway and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou's long position.| China Railway vs. Hainan Mining Co | China Railway vs. Jiangsu Yanghe Brewery | China Railway vs. Lootom Telcovideo Network | China Railway vs. Zijin Mining Group |
| Guangxi Wuzhou vs. China Petroleum Chemical | Guangxi Wuzhou vs. PetroChina Co Ltd | Guangxi Wuzhou vs. China State Construction | Guangxi Wuzhou 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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