Correlation Between China Satellite and Railway Signal
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By analyzing existing cross correlation between China Satellite Communications and Railway Signal Communication, you can compare the effects of market volatilities on China Satellite and Railway Signal 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 Railway Signal. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Satellite and Railway Signal.
Diversification Opportunities for China Satellite and Railway Signal
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Railway is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China Satellite Communications and Railway Signal Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Railway Signal Commu 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 Railway Signal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Railway Signal Commu has no effect on the direction of China Satellite i.e., China Satellite and Railway Signal go up and down completely randomly.
Pair Corralation between China Satellite and Railway Signal
Assuming the 90 days trading horizon China Satellite Communications is expected to generate 1.27 times more return on investment than Railway Signal. However, China Satellite is 1.27 times more volatile than Railway Signal Communication. It trades about 0.11 of its potential returns per unit of risk. Railway Signal Communication is currently generating about 0.04 per unit of risk. If you would invest 1,533 in China Satellite Communications on August 31, 2024 and sell it today you would earn a total of 784.00 from holding China Satellite Communications or generate 51.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Satellite Communications vs. Railway Signal Communication
Performance |
| Timeline |
| China Satellite Comm |
| Railway Signal Commu |
China Satellite and Railway Signal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Satellite and Railway Signal
The main advantage of trading using opposite China Satellite and Railway Signal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Satellite position performs unexpectedly, Railway Signal 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 Railway Signal will offset losses from the drop in Railway Signal's long position.| China Satellite vs. BYD Co Ltd | China Satellite vs. Agricultural Bank of | China Satellite vs. Industrial and Commercial | China Satellite vs. China State Construction |
| Railway Signal vs. Cultural Investment Holdings | Railway Signal vs. Gome Telecom Equipment | Railway Signal vs. Bus Online Co | Railway Signal vs. Holitech Technology 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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