Correlation Between China Railway and JuneYao Dairy
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By analyzing existing cross correlation between China Railway Group and JuneYao Dairy Co, you can compare the effects of market volatilities on China Railway and JuneYao Dairy 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 JuneYao Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and JuneYao Dairy.
Diversification Opportunities for China Railway and JuneYao Dairy
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and JuneYao is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and JuneYao Dairy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JuneYao Dairy 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 JuneYao Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JuneYao Dairy has no effect on the direction of China Railway i.e., China Railway and JuneYao Dairy go up and down completely randomly.
Pair Corralation between China Railway and JuneYao Dairy
Assuming the 90 days trading horizon China Railway Group is expected to generate 0.83 times more return on investment than JuneYao Dairy. However, China Railway Group is 1.2 times less risky than JuneYao Dairy. It trades about 0.03 of its potential returns per unit of risk. JuneYao Dairy Co is currently generating about -0.04 per unit of risk. If you would invest 544.00 in China Railway Group on September 12, 2024 and sell it today you would earn a total of 115.00 from holding China Railway Group or generate 21.14% 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. JuneYao Dairy Co
Performance |
| Timeline |
| China Railway Group |
| JuneYao Dairy |
China Railway and JuneYao Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and JuneYao Dairy
The main advantage of trading using opposite China Railway and JuneYao Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, JuneYao Dairy 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 JuneYao Dairy will offset losses from the drop in JuneYao Dairy's long position.| China Railway vs. Changchun BCHT Biotechnology | China Railway vs. Ningbo MedicalSystem Biotechnology | China Railway vs. Lander Sports Development | China Railway vs. Heilongjiang Publishing Media |
| JuneYao Dairy vs. China Petroleum Chemical | JuneYao Dairy vs. PetroChina Co Ltd | JuneYao Dairy vs. China State Construction | JuneYao Dairy 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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