Correlation Between China Railway and Shandong Homey
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By analyzing existing cross correlation between China Railway Group and Shandong Homey Aquatic, you can compare the effects of market volatilities on China Railway and Shandong Homey 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 Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Shandong Homey.
Diversification Opportunities for China Railway and Shandong Homey
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shandong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of China Railway i.e., China Railway and Shandong Homey go up and down completely randomly.
Pair Corralation between China Railway and Shandong Homey
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Shandong Homey. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 2.68 times less risky than Shandong Homey. The stock trades about -0.04 of its potential returns per unit of risk. The Shandong Homey Aquatic is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Shandong Homey Aquatic on August 29, 2024 and sell it today you would earn a total of 39.00 from holding Shandong Homey Aquatic or generate 19.5% 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. Shandong Homey Aquatic
Performance |
| Timeline |
| China Railway Group |
| Shandong Homey Aquatic |
China Railway and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Shandong Homey
The main advantage of trading using opposite China Railway and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey's long position.| China Railway vs. CICT Mobile Communication | China Railway vs. Spring Airlines Co | China Railway vs. Railway Signal Communication | China Railway vs. 360 Security Technology |
| Shandong Homey vs. China Petroleum Chemical | Shandong Homey vs. PetroChina Co Ltd | Shandong Homey vs. China State Construction | Shandong Homey 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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