Correlation Between China International and Fujian Rongji
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By analyzing existing cross correlation between China International Capital and Fujian Rongji Software, you can compare the effects of market volatilities on China International and Fujian Rongji 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 Fujian Rongji. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Fujian Rongji.
Diversification Opportunities for China International and Fujian Rongji
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Fujian is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital and Fujian Rongji Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Rongji Software 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 Fujian Rongji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Rongji Software has no effect on the direction of China International i.e., China International and Fujian Rongji go up and down completely randomly.
Pair Corralation between China International and Fujian Rongji
Assuming the 90 days trading horizon China International is expected to generate 3.75 times less return on investment than Fujian Rongji. But when comparing it to its historical volatility, China International Capital is 3.07 times less risky than Fujian Rongji. It trades about 0.36 of its potential returns per unit of risk. Fujian Rongji Software is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 592.00 in Fujian Rongji Software on November 27, 2024 and sell it today you would earn a total of 191.00 from holding Fujian Rongji Software or generate 32.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China International Capital vs. Fujian Rongji Software
Performance |
| Timeline |
| China International |
| Fujian Rongji Software |
China International and Fujian Rongji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and Fujian Rongji
The main advantage of trading using opposite China International and Fujian Rongji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International position performs unexpectedly, Fujian Rongji 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 Fujian Rongji will offset losses from the drop in Fujian Rongji's long position.| China International vs. Keeson Technology Corp | China International vs. Beijing Mainstreets Investment | China International vs. Hubei Geoway Investment | China International vs. Chengdu Xingrong Investment |
| Fujian Rongji vs. Offshore Oil Engineering | Fujian Rongji vs. Anhui Huaren Health | Fujian Rongji vs. Humanwell Healthcare Group | Fujian Rongji vs. King Strong New Material |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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