Correlation Between China Railway and Keli Sensing
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By analyzing existing cross correlation between China Railway Group and Keli Sensing Technology, you can compare the effects of market volatilities on China Railway and Keli Sensing 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 Keli Sensing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Keli Sensing.
Diversification Opportunities for China Railway and Keli Sensing
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Keli is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Keli Sensing Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keli Sensing Technology 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 Keli Sensing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keli Sensing Technology has no effect on the direction of China Railway i.e., China Railway and Keli Sensing go up and down completely randomly.
Pair Corralation between China Railway and Keli Sensing
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Keli Sensing. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 2.7 times less risky than Keli Sensing. The stock trades about -0.01 of its potential returns per unit of risk. The Keli Sensing Technology is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,299 in Keli Sensing Technology on August 30, 2024 and sell it today you would earn a total of 1,385 from holding Keli Sensing Technology or generate 41.98% 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. Keli Sensing Technology
Performance |
| Timeline |
| China Railway Group |
| Keli Sensing Technology |
China Railway and Keli Sensing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Keli Sensing
The main advantage of trading using opposite China Railway and Keli Sensing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Keli Sensing 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 Keli Sensing will offset losses from the drop in Keli Sensing's long position.| China Railway vs. Hefei Metalforming Mach | China Railway vs. Hainan Mining Co | China Railway vs. Sunny Loan Top | China Railway vs. XinJiang GuoTong Pipeline |
| Keli Sensing vs. China Petroleum Chemical | Keli Sensing vs. PetroChina Co Ltd | Keli Sensing vs. China State Construction | Keli Sensing 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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