Correlation Between China State and Monalisa Group
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By analyzing existing cross correlation between China State Construction and Monalisa Group Co, you can compare the effects of market volatilities on China State and Monalisa Group 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 Monalisa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Monalisa Group.
Diversification Opportunities for China State and Monalisa Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Monalisa is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Monalisa Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monalisa Group 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 Monalisa Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monalisa Group has no effect on the direction of China State i.e., China State and Monalisa Group go up and down completely randomly.
Pair Corralation between China State and Monalisa Group
Assuming the 90 days trading horizon China State is expected to generate 14.7 times less return on investment than Monalisa Group. But when comparing it to its historical volatility, China State Construction is 6.49 times less risky than Monalisa Group. It trades about 0.01 of its potential returns per unit of risk. Monalisa Group Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,007 in Monalisa Group Co on August 30, 2024 and sell it today you would lose (1,135) from holding Monalisa Group Co or give up 56.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.2% |
| Values | Daily Returns |
China State Construction vs. Monalisa Group Co
Performance |
| Timeline |
| China State Construction |
| Monalisa Group |
China State and Monalisa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Monalisa Group
The main advantage of trading using opposite China State and Monalisa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Monalisa Group 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 Monalisa Group will offset losses from the drop in Monalisa Group's long position.| China State vs. Shenyang Chemical Industry | China State vs. Lianhe Chemical Technology | China State vs. North Huajin Chemical | China State vs. Maoming Petro Chemical Shihua |
| Monalisa Group vs. PetroChina Co Ltd | Monalisa Group vs. China State Construction | Monalisa Group vs. China Mobile Limited | Monalisa Group vs. Industrial and Commercial |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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