Correlation Between China Galaxy and Shaanxi Construction
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By analyzing existing cross correlation between China Galaxy Securities and Shaanxi Construction Machinery, you can compare the effects of market volatilities on China Galaxy and Shaanxi Construction 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 Galaxy with a short position of Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Galaxy and Shaanxi Construction.
Diversification Opportunities for China Galaxy and Shaanxi Construction
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shaanxi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Galaxy Securities and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction and China Galaxy 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 Galaxy Securities are associated (or correlated) with Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of China Galaxy i.e., China Galaxy and Shaanxi Construction go up and down completely randomly.
Pair Corralation between China Galaxy and Shaanxi Construction
Assuming the 90 days trading horizon China Galaxy Securities is expected to generate 0.57 times more return on investment than Shaanxi Construction. However, China Galaxy Securities is 1.74 times less risky than Shaanxi Construction. It trades about -0.18 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about -0.18 per unit of risk. If you would invest 1,524 in China Galaxy Securities on October 17, 2024 and sell it today you would lose (136.00) from holding China Galaxy Securities or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Galaxy Securities vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| China Galaxy Securities |
| Shaanxi Construction |
China Galaxy and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Galaxy and Shaanxi Construction
The main advantage of trading using opposite China Galaxy and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Galaxy position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| China Galaxy vs. Jinlong Machinery Electronic | China Galaxy vs. Iat Automobile Technology | China Galaxy vs. Huasi Agricultural Development | China Galaxy vs. Masterwork Machinery |
| Shaanxi Construction vs. Jiangsu Xinri E Vehicle | Shaanxi Construction vs. RoadMain T Co | Shaanxi Construction vs. Hubeiyichang Transportation Group | Shaanxi Construction vs. Chongqing Changan Automobile |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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