Correlation Between China Everbright and Central Plains
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By analyzing existing cross correlation between China Everbright Bank and Central Plains Environment, you can compare the effects of market volatilities on China Everbright and Central Plains 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 Everbright with a short position of Central Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and Central Plains.
Diversification Opportunities for China Everbright and Central Plains
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Central is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Bank and Central Plains Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Plains Envir and China Everbright 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 Everbright Bank are associated (or correlated) with Central Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Plains Envir has no effect on the direction of China Everbright i.e., China Everbright and Central Plains go up and down completely randomly.
Pair Corralation between China Everbright and Central Plains
Assuming the 90 days trading horizon China Everbright is expected to generate 1.36 times less return on investment than Central Plains. But when comparing it to its historical volatility, China Everbright Bank is 1.56 times less risky than Central Plains. It trades about 0.05 of its potential returns per unit of risk. Central Plains Environment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 619.00 in Central Plains Environment on October 12, 2024 and sell it today you would earn a total of 206.00 from holding Central Plains Environment or generate 33.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
China Everbright Bank vs. Central Plains Environment
Performance |
| Timeline |
| China Everbright Bank |
| Central Plains Envir |
China Everbright and Central Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and Central Plains
The main advantage of trading using opposite China Everbright and Central Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, Central Plains 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 Central Plains will offset losses from the drop in Central Plains' long position.| China Everbright vs. Guangzhou Dongfang Hotel | China Everbright vs. Guangzhou Ruoyuchen Information | China Everbright vs. Unisplendour Corp | China Everbright vs. ButOne Information Corp |
| Central Plains vs. Guangdong Liantai Environmental | Central Plains vs. City Development Environment | Central Plains vs. Lingyuan Iron Steel | Central Plains vs. Fujian Nanwang Environment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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