Correlation Between China International and Central China
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By analyzing existing cross correlation between China International Capital and Central China Land, you can compare the effects of market volatilities on China International and Central China 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 International with a short position of Central China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Central China.
Diversification Opportunities for China International and Central China
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Central is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital and Central China Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central China Land and China International 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 International Capital are associated (or correlated) with Central China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central China Land has no effect on the direction of China International i.e., China International and Central China go up and down completely randomly.
Pair Corralation between China International and Central China
Assuming the 90 days trading horizon China International Capital is expected to generate 1.12 times more return on investment than Central China. However, China International is 1.12 times more volatile than Central China Land. It trades about -0.08 of its potential returns per unit of risk. Central China Land is currently generating about -0.14 per unit of risk. If you would invest 3,659 in China International Capital on August 29, 2024 and sell it today you would lose (210.00) from holding China International Capital or give up 5.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China International Capital vs. Central China Land
Performance |
| Timeline |
| China International |
| Central China Land |
China International and Central China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and Central China
The main advantage of trading using opposite China International and Central China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International position performs unexpectedly, Central China 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 China will offset losses from the drop in Central China's long position.| China International vs. Youyou Foods Co | China International vs. Sinomach General Machinery | China International vs. Shanghai Ziyan Foods | China International vs. Sichuan Teway Food |
| Central China vs. Industrial and Commercial | Central China vs. Agricultural Bank of | Central China vs. China Construction Bank | Central China vs. Bank of China |
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 CEOs Directory module to screen CEOs from public companies around the world.
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