Correlation Between China State and Sichuan Newsnet
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By analyzing existing cross correlation between China State Construction and Sichuan Newsnet Media, you can compare the effects of market volatilities on China State and Sichuan Newsnet 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 Sichuan Newsnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Sichuan Newsnet.
Diversification Opportunities for China State and Sichuan Newsnet
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Sichuan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Sichuan Newsnet Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Newsnet Media 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 Sichuan Newsnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Newsnet Media has no effect on the direction of China State i.e., China State and Sichuan Newsnet go up and down completely randomly.
Pair Corralation between China State and Sichuan Newsnet
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Sichuan Newsnet. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 3.55 times less risky than Sichuan Newsnet. The stock trades about -0.27 of its potential returns per unit of risk. The Sichuan Newsnet Media is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,416 in Sichuan Newsnet Media on November 1, 2024 and sell it today you would earn a total of 108.00 from holding Sichuan Newsnet Media or generate 7.63% 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. Sichuan Newsnet Media
Performance |
| Timeline |
| China State Construction |
| Sichuan Newsnet Media |
China State and Sichuan Newsnet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Sichuan Newsnet
The main advantage of trading using opposite China State and Sichuan Newsnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Sichuan Newsnet 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 Sichuan Newsnet will offset losses from the drop in Sichuan Newsnet's long position.| China State vs. Ping An Insurance | China State vs. Jiangnan Mould Plastic | China State vs. Quectel Wireless Solutions | China State vs. Guangzhou Tinci Materials |
| Sichuan Newsnet vs. Allgens Medical Technology | Sichuan Newsnet vs. Double Medical Technology | Sichuan Newsnet vs. Shandong Intco Medical | Sichuan Newsnet vs. Shenzhen Glory Medical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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