Correlation Between China State and Northern United
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By analyzing existing cross correlation between China State Construction and Northern United Publishing, you can compare the effects of market volatilities on China State and Northern United 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 Northern United. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Northern United.
Diversification Opportunities for China State and Northern United
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Northern is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Northern United Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern United Publ 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 Northern United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern United Publ has no effect on the direction of China State i.e., China State and Northern United go up and down completely randomly.
Pair Corralation between China State and Northern United
Assuming the 90 days trading horizon China State Construction is expected to generate 0.64 times more return on investment than Northern United. However, China State Construction is 1.57 times less risky than Northern United. It trades about 0.06 of its potential returns per unit of risk. Northern United Publishing is currently generating about 0.0 per unit of risk. If you would invest 481.00 in China State Construction on August 25, 2024 and sell it today you would earn a total of 114.00 from holding China State Construction or generate 23.7% 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. Northern United Publishing
Performance |
| Timeline |
| China State Construction |
| Northern United Publ |
China State and Northern United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Northern United
The main advantage of trading using opposite China State and Northern United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Northern United 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 Northern United will offset losses from the drop in Northern United'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 |
| Northern United vs. China State Construction | Northern United vs. Huafa Industrial Co | Northern United vs. China International Capital | Northern United vs. Kweichow Moutai 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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