Correlation Between China State and China Railway
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By analyzing existing cross correlation between China State Construction and China Railway Construction, you can compare the effects of market volatilities on China State and China Railway 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 Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and China Railway.
Diversification Opportunities for China State and China Railway
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and China is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr 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 Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of China State i.e., China State and China Railway go up and down completely randomly.
Pair Corralation between China State and China Railway
Assuming the 90 days trading horizon China State Construction is expected to under-perform the China Railway. In addition to that, China State is 1.1 times more volatile than China Railway Construction. It trades about -0.01 of its total potential returns per unit of risk. China Railway Construction is currently generating about 0.16 per unit of volatility. If you would invest 446.00 in China Railway Construction on September 1, 2024 and sell it today you would earn a total of 30.00 from holding China Railway Construction or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China State Construction vs. China Railway Construction
Performance |
| Timeline |
| China State Construction |
| China Railway Constr |
China State and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and China Railway
The main advantage of trading using opposite China State and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, China Railway 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 Railway will offset losses from the drop in China Railway's long position.| China State vs. Hunan Investment Group | China State vs. Huaibei Mining Holdings | China State vs. Metro Investment Development | China State vs. Postal Savings Bank |
| China Railway vs. Longjian Road Bridge | China Railway vs. Tibet Huayu Mining | China Railway vs. Heilongjiang Transport Development | China Railway vs. Yunnan Xiyi Industrial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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