Correlation Between China State and Zhongtong Guomai
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By analyzing existing cross correlation between China State Construction and Zhongtong Guomai Communication, you can compare the effects of market volatilities on China State and Zhongtong Guomai 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 Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Zhongtong Guomai.
Diversification Opportunities for China State and Zhongtong Guomai
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Zhongtong is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com 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 Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of China State i.e., China State and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between China State and Zhongtong Guomai
Assuming the 90 days trading horizon China State is expected to generate 10.54 times less return on investment than Zhongtong Guomai. But when comparing it to its historical volatility, China State Construction is 1.66 times less risky than Zhongtong Guomai. It trades about 0.04 of its potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 421.00 in Zhongtong Guomai Communication on September 3, 2024 and sell it today you would earn a total of 700.00 from holding Zhongtong Guomai Communication or generate 166.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Zhongtong Guomai Communication
Performance |
| Timeline |
| China State Construction |
| Zhongtong Guomai Com |
China State and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Zhongtong Guomai
The main advantage of trading using opposite China State and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Zhongtong Guomai 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 Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.| China State vs. Citic Guoan Wine | China State vs. Shanghai Yanpu Metal | China State vs. Tongyu Communication | China State vs. Guangxi Wuzhou Communications |
| Zhongtong Guomai vs. Agricultural Bank of | Zhongtong Guomai vs. China Construction Bank | Zhongtong Guomai vs. Postal Savings Bank | Zhongtong Guomai vs. Bank of Communications |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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