Correlation Between China State and Elite Color
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By analyzing existing cross correlation between China State Construction and Elite Color Environmental, you can compare the effects of market volatilities on China State and Elite Color 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 Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Elite Color.
Diversification Opportunities for China State and Elite Color
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Elite is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental 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 Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of China State i.e., China State and Elite Color go up and down completely randomly.
Pair Corralation between China State and Elite Color
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Elite Color. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.3 times less risky than Elite Color. The stock trades about -0.01 of its potential returns per unit of risk. The Elite Color Environmental is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 664.00 in Elite Color Environmental on August 26, 2024 and sell it today you would lose (2.00) from holding Elite Color Environmental or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Elite Color Environmental
Performance |
| Timeline |
| China State Construction |
| Elite Color Environmental |
China State and Elite Color Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Elite Color
The main advantage of trading using opposite China State and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color's long position.| China State vs. Tongxing Environmental Protection | China State vs. Youyou Foods Co | China State vs. Shantou Wanshun Package | China State vs. Suzhou Weizhixiang Food |
| Elite Color vs. Zijin Mining Group | Elite Color vs. Baoshan Iron Steel | Elite Color vs. Shandong Gold Mining | Elite Color vs. Rongsheng Petrochemical Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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