Correlation Between Hefei Metalforming and China Railway
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By analyzing existing cross correlation between Hefei Metalforming Mach and China Railway Group, you can compare the effects of market volatilities on Hefei Metalforming and China Railway 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 Hefei Metalforming with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hefei Metalforming and China Railway.
Diversification Opportunities for Hefei Metalforming and China Railway
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hefei and China is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hefei Metalforming Mach and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group and Hefei Metalforming 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 Hefei Metalforming Mach are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Group has no effect on the direction of Hefei Metalforming i.e., Hefei Metalforming and China Railway go up and down completely randomly.
Pair Corralation between Hefei Metalforming and China Railway
Assuming the 90 days trading horizon Hefei Metalforming Mach is expected to generate 1.84 times more return on investment than China Railway. However, Hefei Metalforming is 1.84 times more volatile than China Railway Group. It trades about 0.13 of its potential returns per unit of risk. China Railway Group is currently generating about -0.03 per unit of risk. If you would invest 710.00 in Hefei Metalforming Mach on September 2, 2024 and sell it today you would earn a total of 69.00 from holding Hefei Metalforming Mach or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hefei Metalforming Mach vs. China Railway Group
Performance |
| Timeline |
| Hefei Metalforming Mach |
| China Railway Group |
Hefei Metalforming and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hefei Metalforming and China Railway
The main advantage of trading using opposite Hefei Metalforming and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hefei Metalforming position performs unexpectedly, China Railway 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 Railway will offset losses from the drop in China Railway's long position.| Hefei Metalforming vs. Anhui Transport Consulting | Hefei Metalforming vs. Western Metal Materials | Hefei Metalforming vs. Yunnan Xiyi Industrial | Hefei Metalforming vs. China Minmetals Rare |
| China Railway vs. 159681 | China Railway vs. 159005 | China Railway vs. Loctek Ergonomic Technology | China Railway vs. 516220 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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