Correlation Between China Satellite and Chengtun Mining
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By analyzing existing cross correlation between China Satellite Communications and Chengtun Mining Group, you can compare the effects of market volatilities on China Satellite and Chengtun Mining 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 Satellite with a short position of Chengtun Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Satellite and Chengtun Mining.
Diversification Opportunities for China Satellite and Chengtun Mining
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Chengtun is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding China Satellite Communications and Chengtun Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengtun Mining Group and China Satellite 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 Satellite Communications are associated (or correlated) with Chengtun Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengtun Mining Group has no effect on the direction of China Satellite i.e., China Satellite and Chengtun Mining go up and down completely randomly.
Pair Corralation between China Satellite and Chengtun Mining
Assuming the 90 days trading horizon China Satellite is expected to generate 2.4 times less return on investment than Chengtun Mining. In addition to that, China Satellite is 1.09 times more volatile than Chengtun Mining Group. It trades about 0.09 of its total potential returns per unit of risk. Chengtun Mining Group is currently generating about 0.23 per unit of volatility. If you would invest 472.00 in Chengtun Mining Group on November 7, 2024 and sell it today you would earn a total of 34.00 from holding Chengtun Mining Group or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Satellite Communications vs. Chengtun Mining Group
Performance |
| Timeline |
| China Satellite Comm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chengtun Mining Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Satellite and Chengtun Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Satellite and Chengtun Mining
The main advantage of trading using opposite China Satellite and Chengtun Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Satellite position performs unexpectedly, Chengtun Mining 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 Chengtun Mining will offset losses from the drop in Chengtun Mining's long position.The idea behind China Satellite Communications and Chengtun Mining Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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