Correlation Between China State and Qingdao Foods
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By analyzing existing cross correlation between China State Construction and Qingdao Foods Co, you can compare the effects of market volatilities on China State and Qingdao Foods 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 State with a short position of Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Qingdao Foods.
Diversification Opportunities for China State and Qingdao Foods
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Qingdao is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Foods and China State 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 State Construction are associated (or correlated) with Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of China State i.e., China State and Qingdao Foods go up and down completely randomly.
Pair Corralation between China State and Qingdao Foods
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Qingdao Foods. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.72 times less risky than Qingdao Foods. The stock trades about -0.03 of its potential returns per unit of risk. The Qingdao Foods Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,510 in Qingdao Foods Co on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Qingdao Foods Co or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Qingdao Foods Co
Performance |
| Timeline |
| China State Construction |
| Qingdao Foods |
China State and Qingdao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Qingdao Foods
The main advantage of trading using opposite China State and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.| China State vs. Xilinmen Furniture Co | China State vs. Nanjing OLO Home | China State vs. Iat Automobile Technology | China State vs. Fiberhome Telecommunication Technologies |
| Qingdao Foods vs. China Petroleum Chemical | Qingdao Foods vs. PetroChina Co Ltd | Qingdao Foods vs. China State Construction | Qingdao Foods 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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