Correlation Between China State and ZheJiang BangJie
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By analyzing existing cross correlation between China State Construction and ZheJiang BangJie Digital, you can compare the effects of market volatilities on China State and ZheJiang BangJie 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 ZheJiang BangJie. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and ZheJiang BangJie.
Diversification Opportunities for China State and ZheJiang BangJie
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and ZheJiang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and ZheJiang BangJie Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZheJiang BangJie Digital 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 ZheJiang BangJie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZheJiang BangJie Digital has no effect on the direction of China State i.e., China State and ZheJiang BangJie go up and down completely randomly.
Pair Corralation between China State and ZheJiang BangJie
Assuming the 90 days trading horizon China State Construction is expected to generate 0.63 times more return on investment than ZheJiang BangJie. However, China State Construction is 1.58 times less risky than ZheJiang BangJie. It trades about 0.04 of its potential returns per unit of risk. ZheJiang BangJie Digital is currently generating about 0.02 per unit of risk. If you would invest 558.00 in China State Construction on September 3, 2024 and sell it today you would earn a total of 40.00 from holding China State Construction or generate 7.17% 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. ZheJiang BangJie Digital
Performance |
| Timeline |
| China State Construction |
| ZheJiang BangJie Digital |
China State and ZheJiang BangJie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and ZheJiang BangJie
The main advantage of trading using opposite China State and ZheJiang BangJie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, ZheJiang BangJie 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 ZheJiang BangJie will offset losses from the drop in ZheJiang BangJie's long position.| China State vs. Citic Guoan Wine | China State vs. Shanghai Yanpu Metal | China State vs. Tongyu Communication | China State vs. Guangxi Wuzhou Communications |
| ZheJiang BangJie vs. Harvest Fund Management | ZheJiang BangJie vs. Jiahe Foods Industry | ZheJiang BangJie vs. China Asset Management | ZheJiang BangJie vs. Nexchip Semiconductor Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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