Correlation Between China Building and Southern PublishingMedia
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By analyzing existing cross correlation between China Building Material and Southern PublishingMedia Co, you can compare the effects of market volatilities on China Building and Southern PublishingMedia 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 Building with a short position of Southern PublishingMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and Southern PublishingMedia.
Diversification Opportunities for China Building and Southern PublishingMedia
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Southern is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material and Southern PublishingMedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern PublishingMedia and China Building 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 Building Material are associated (or correlated) with Southern PublishingMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern PublishingMedia has no effect on the direction of China Building i.e., China Building and Southern PublishingMedia go up and down completely randomly.
Pair Corralation between China Building and Southern PublishingMedia
Assuming the 90 days trading horizon China Building Material is expected to under-perform the Southern PublishingMedia. But the stock apears to be less risky and, when comparing its historical volatility, China Building Material is 1.02 times less risky than Southern PublishingMedia. The stock trades about -0.48 of its potential returns per unit of risk. The Southern PublishingMedia Co is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 1,585 in Southern PublishingMedia Co on October 14, 2024 and sell it today you would lose (148.00) from holding Southern PublishingMedia Co or give up 9.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Building Material vs. Southern PublishingMedia Co
Performance |
| Timeline |
| China Building Material |
| Southern PublishingMedia |
China Building and Southern PublishingMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Building and Southern PublishingMedia
The main advantage of trading using opposite China Building and Southern PublishingMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building position performs unexpectedly, Southern PublishingMedia 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 Southern PublishingMedia will offset losses from the drop in Southern PublishingMedia's long position.| China Building vs. Qilu Bank Co | China Building vs. HeBei Jinniu Chemical | China Building vs. Unisplendour Corp | China Building vs. Longxing Chemical Stock |
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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