Correlation Between China State and Muyuan Foodstuff
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By analyzing existing cross correlation between China State Construction and Muyuan Foodstuff Co, you can compare the effects of market volatilities on China State and Muyuan Foodstuff 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 Muyuan Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Muyuan Foodstuff.
Diversification Opportunities for China State and Muyuan Foodstuff
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Muyuan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Muyuan Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muyuan Foodstuff 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 Muyuan Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muyuan Foodstuff has no effect on the direction of China State i.e., China State and Muyuan Foodstuff go up and down completely randomly.
Pair Corralation between China State and Muyuan Foodstuff
Assuming the 90 days trading horizon China State Construction is expected to generate 1.03 times more return on investment than Muyuan Foodstuff. However, China State is 1.03 times more volatile than Muyuan Foodstuff Co. It trades about 0.02 of its potential returns per unit of risk. Muyuan Foodstuff Co is currently generating about -0.31 per unit of risk. If you would invest 609.00 in China State Construction on September 13, 2024 and sell it today you would earn a total of 2.00 from holding China State Construction or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Muyuan Foodstuff Co
Performance |
| Timeline |
| China State Construction |
| Muyuan Foodstuff |
China State and Muyuan Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Muyuan Foodstuff
The main advantage of trading using opposite China State and Muyuan Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Muyuan Foodstuff 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 Muyuan Foodstuff will offset losses from the drop in Muyuan Foodstuff's long position.| China State vs. Hangzhou Coco Healthcare | China State vs. Zhejiang Qianjiang Motorcycle | China State vs. Anhui Jianghuai Automobile | China State vs. Ningbo Fangzheng Automobile |
| Muyuan Foodstuff vs. Nanjing Putian Telecommunications | Muyuan Foodstuff vs. Tianjin Realty Development | Muyuan Foodstuff vs. Kangyue Technology Co | Muyuan Foodstuff vs. Shenzhen Hifuture Electric |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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