Correlation Between Zhongtong Guomai and China Satellite
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By analyzing existing cross correlation between Zhongtong Guomai Communication and China Satellite Communications, you can compare the effects of market volatilities on Zhongtong Guomai and China Satellite 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 Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and China Satellite.
Diversification Opportunities for Zhongtong Guomai and China Satellite
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongtong and China is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and China Satellite Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Satellite Comm 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 Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Satellite Comm has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and China Satellite go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and China Satellite
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to under-perform the China Satellite. But the stock apears to be less risky and, when comparing its historical volatility, Zhongtong Guomai Communication is 1.52 times less risky than China Satellite. The stock trades about -0.03 of its potential returns per unit of risk. The China Satellite Communications is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,690 in China Satellite Communications on September 4, 2024 and sell it today you would earn a total of 610.00 from holding China Satellite Communications or generate 36.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. China Satellite Communications
Performance |
| Timeline |
| Zhongtong Guomai Com |
| China Satellite Comm |
Zhongtong Guomai and China Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and China Satellite
The main advantage of trading using opposite Zhongtong Guomai and China Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, China Satellite 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 Satellite will offset losses from the drop in China Satellite's long position.| Zhongtong Guomai vs. Wuhan Xianglong Power | Zhongtong Guomai vs. Yuanjie Semiconductor Technology | Zhongtong Guomai vs. Kuang Chi Technologies | Zhongtong Guomai vs. Yunnan Bowin Technology |
| China Satellite vs. New China Life | China Satellite vs. Ming Yang Smart | China Satellite vs. 159681 | China Satellite vs. 159005 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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