Correlation Between China Railway and Zhongyin Babi
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By analyzing existing cross correlation between China Railway Group and Zhongyin Babi Food, you can compare the effects of market volatilities on China Railway and Zhongyin Babi 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 Zhongyin Babi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Zhongyin Babi.
Diversification Opportunities for China Railway and Zhongyin Babi
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Zhongyin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Zhongyin Babi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongyin Babi Food 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 Zhongyin Babi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongyin Babi Food has no effect on the direction of China Railway i.e., China Railway and Zhongyin Babi go up and down completely randomly.
Pair Corralation between China Railway and Zhongyin Babi
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Zhongyin Babi. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 1.02 times less risky than Zhongyin Babi. The stock trades about -0.02 of its potential returns per unit of risk. The Zhongyin Babi Food is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,557 in Zhongyin Babi Food on August 25, 2024 and sell it today you would earn a total of 39.00 from holding Zhongyin Babi Food or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Zhongyin Babi Food
Performance |
| Timeline |
| China Railway Group |
| Zhongyin Babi Food |
China Railway and Zhongyin Babi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Zhongyin Babi
The main advantage of trading using opposite China Railway and Zhongyin Babi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Zhongyin Babi 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 Zhongyin Babi will offset losses from the drop in Zhongyin Babi's long position.| China Railway vs. Winner Medical Co | China Railway vs. Hengkang Medical Group | China Railway vs. Lander Sports Development | China Railway vs. Shuhua Sports Co |
| Zhongyin Babi vs. China Petroleum Chemical | Zhongyin Babi vs. PetroChina Co Ltd | Zhongyin Babi vs. China State Construction | Zhongyin Babi 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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