Correlation Between China Everbright and China United
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By analyzing existing cross correlation between China Everbright Bank and China United Network, you can compare the effects of market volatilities on China Everbright and China United 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 China United. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and China United.
Diversification Opportunities for China Everbright and China United
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and China is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Bank and China United Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China United Network 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 China United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China United Network has no effect on the direction of China Everbright i.e., China Everbright and China United go up and down completely randomly.
Pair Corralation between China Everbright and China United
Assuming the 90 days trading horizon China Everbright Bank is expected to generate 0.47 times more return on investment than China United. However, China Everbright Bank is 2.12 times less risky than China United. It trades about 0.15 of its potential returns per unit of risk. China United Network is currently generating about 0.05 per unit of risk. If you would invest 345.00 in China Everbright Bank on September 2, 2024 and sell it today you would earn a total of 15.00 from holding China Everbright Bank or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Everbright Bank vs. China United Network
Performance |
| Timeline |
| China Everbright Bank |
| China United Network |
China Everbright and China United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and China United
The main advantage of trading using opposite China Everbright and China United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, China United 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 United will offset losses from the drop in China United's long position.| China Everbright vs. Kweichow Moutai Co | China Everbright vs. Shenzhen Mindray Bio Medical | China Everbright vs. Jiangsu Pacific Quartz | China Everbright vs. G bits Network Technology |
| China United vs. China Everbright Bank | China United vs. Shandong Sinoglory Health | China United vs. Nancal Energy Saving Tech | China United vs. Shanghai Rongtai Health |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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