Correlation Between China State and China Satellite
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By analyzing existing cross correlation between China State Construction and China Satellite Communications, you can compare the effects of market volatilities on China State and China Satellite 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 China Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and China Satellite.
Diversification Opportunities for China State and China Satellite
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and China Satellite Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Satellite Comm 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 China Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Satellite Comm has no effect on the direction of China State i.e., China State and China Satellite go up and down completely randomly.
Pair Corralation between China State and China Satellite
Assuming the 90 days trading horizon China State is expected to generate 13.26 times less return on investment than China Satellite. But when comparing it to its historical volatility, China State Construction is 2.63 times less risky than China Satellite. It trades about 0.03 of its potential returns per unit of risk. China Satellite Communications is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,979 in China Satellite Communications on November 29, 2024 and sell it today you would earn a total of 114.00 from holding China Satellite Communications or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
China State Construction vs. China Satellite Communications
Performance |
| Timeline |
| China State Construction |
| China Satellite Comm |
China State and China Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and China Satellite
The main advantage of trading using opposite China State and China Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, China Satellite 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 China Satellite will offset losses from the drop in China Satellite's long position.| China State vs. TongFu Microelectronics Co | China State vs. Guangzhou Zhujiang Brewery | China State vs. Guangdong Ellington Electronics | China State vs. Farsoon Technology Co |
| China Satellite vs. Ningbo Tech Bank Co | China Satellite vs. Guangzhou Jinyi Media | China Satellite vs. Duzhe Publishing Media | China Satellite vs. Hua Xia Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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