Correlation Between China Everbright and City Development
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By analyzing existing cross correlation between China Everbright Bank and City Development Environment, you can compare the effects of market volatilities on China Everbright and City Development 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 City Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and City Development.
Diversification Opportunities for China Everbright and City Development
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and City is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Bank and City Development Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Development Env 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 City Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Development Env has no effect on the direction of China Everbright i.e., China Everbright and City Development go up and down completely randomly.
Pair Corralation between China Everbright and City Development
Assuming the 90 days trading horizon China Everbright is expected to generate 1.17 times less return on investment than City Development. But when comparing it to its historical volatility, China Everbright Bank is 1.59 times less risky than City Development. It trades about 0.05 of its potential returns per unit of risk. City Development Environment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 981.00 in City Development Environment on October 12, 2024 and sell it today you would earn a total of 253.00 from holding City Development Environment or generate 25.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Everbright Bank vs. City Development Environment
Performance |
| Timeline |
| China Everbright Bank |
| City Development Env |
China Everbright and City Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and City Development
The main advantage of trading using opposite China Everbright and City Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, City Development 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 City Development will offset losses from the drop in City Development's 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 |
| City Development vs. Western Metal Materials | City Development vs. Ningbo Tip Rubber | City Development vs. Chongqing Sulian Plastic | City Development vs. Fuda Alloy Materials |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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