Correlation Between Guangzhou Restaurants and China Railway
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By analyzing existing cross correlation between Guangzhou Restaurants Group and China Railway Construction, you can compare the effects of market volatilities on Guangzhou Restaurants 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 Guangzhou Restaurants with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and China Railway.
Diversification Opportunities for Guangzhou Restaurants and China Railway
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and China is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Guangzhou Restaurants 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 Guangzhou Restaurants Group 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 Constr has no effect on the direction of Guangzhou Restaurants i.e., Guangzhou Restaurants and China Railway go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and China Railway
Assuming the 90 days trading horizon Guangzhou Restaurants Group is expected to generate 1.57 times more return on investment than China Railway. However, Guangzhou Restaurants is 1.57 times more volatile than China Railway Construction. It trades about 0.18 of its potential returns per unit of risk. China Railway Construction is currently generating about -0.07 per unit of risk. If you would invest 1,677 in Guangzhou Restaurants Group on September 13, 2024 and sell it today you would earn a total of 142.00 from holding Guangzhou Restaurants Group or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Restaurants Group vs. China Railway Construction
Performance |
| Timeline |
| Guangzhou Restaurants |
| China Railway Constr |
Guangzhou Restaurants and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and China Railway
The main advantage of trading using opposite Guangzhou Restaurants and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants 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.| Guangzhou Restaurants vs. Kweichow Moutai Co | Guangzhou Restaurants vs. Shenzhen Mindray Bio Medical | Guangzhou Restaurants vs. Jiangsu Pacific Quartz | Guangzhou Restaurants vs. G bits Network Technology |
| China Railway vs. Industrial and Commercial | China Railway vs. Kweichow Moutai Co | China Railway vs. Agricultural Bank of | China Railway vs. China Mobile Limited |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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