Correlation Between China International and China Enterprise
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By analyzing existing cross correlation between China International Capital and China Enterprise Co, you can compare the effects of market volatilities on China International and China Enterprise 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 China Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and China Enterprise.
Diversification Opportunities for China International and China Enterprise
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital and China Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Enterprise 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 China Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Enterprise has no effect on the direction of China International i.e., China International and China Enterprise go up and down completely randomly.
Pair Corralation between China International and China Enterprise
Assuming the 90 days trading horizon China International Capital is expected to generate 0.42 times more return on investment than China Enterprise. However, China International Capital is 2.35 times less risky than China Enterprise. It trades about 0.03 of its potential returns per unit of risk. China Enterprise Co is currently generating about -0.04 per unit of risk. If you would invest 3,502 in China International Capital on September 28, 2024 and sell it today you would earn a total of 25.00 from holding China International Capital or generate 0.71% 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. China Enterprise Co
Performance |
| Timeline |
| China International |
| China Enterprise |
China International and China Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and China Enterprise
The main advantage of trading using opposite China International and China Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International position performs unexpectedly, China Enterprise 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 Enterprise will offset losses from the drop in China Enterprise's long position.| China International vs. Kweichow Moutai Co | China International vs. Contemporary Amperex Technology | China International vs. G bits Network Technology | China International vs. BYD Co Ltd |
| China Enterprise vs. INKON Life Technology | China Enterprise vs. Chahua Modern Housewares | China Enterprise vs. Anhui Deli Household | China Enterprise vs. China World Trade |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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