Correlation Between Zhongtong Guomai and China Railway
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By analyzing existing cross correlation between Zhongtong Guomai Communication and China Railway Group, you can compare the effects of market volatilities on Zhongtong Guomai 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 Zhongtong Guomai with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and China Railway.
Diversification Opportunities for Zhongtong Guomai and China Railway
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhongtong and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication 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 Zhongtong Guomai 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 Zhongtong Guomai Communication 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 Zhongtong Guomai i.e., Zhongtong Guomai and China Railway go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and China Railway
Assuming the 90 days trading horizon Zhongtong Guomai is expected to generate 1.59 times less return on investment than China Railway. In addition to that, Zhongtong Guomai is 1.43 times more volatile than China Railway Group. It trades about 0.01 of its total potential returns per unit of risk. China Railway Group is currently generating about 0.02 per unit of volatility. If you would invest 583.00 in China Railway Group on September 3, 2024 and sell it today you would earn a total of 58.00 from holding China Railway Group or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. China Railway Group
Performance |
| Timeline |
| Zhongtong Guomai Com |
| China Railway Group |
Zhongtong Guomai and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and China Railway
The main advantage of trading using opposite Zhongtong Guomai and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai 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.| Zhongtong Guomai vs. Agricultural Bank of | Zhongtong Guomai vs. China Construction Bank | Zhongtong Guomai vs. Postal Savings Bank | Zhongtong Guomai vs. Bank of Communications |
| China Railway vs. Zhongtong Guomai Communication | China Railway vs. Ningbo Homelink Eco iTech | China Railway vs. Wuhan Yangtze Communication | China Railway vs. Railway Signal Communication |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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