Correlation Between RoadMain T and China Railway
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By analyzing existing cross correlation between RoadMain T Co and China Railway Group, you can compare the effects of market volatilities on RoadMain T 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 RoadMain T with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of RoadMain T and China Railway.
Diversification Opportunities for RoadMain T and China Railway
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RoadMain and China is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding RoadMain T Co 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 RoadMain T 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 RoadMain T Co 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 RoadMain T i.e., RoadMain T and China Railway go up and down completely randomly.
Pair Corralation between RoadMain T and China Railway
Assuming the 90 days trading horizon RoadMain T Co is expected to under-perform the China Railway. In addition to that, RoadMain T is 2.25 times more volatile than China Railway Group. It trades about -0.19 of its total potential returns per unit of risk. China Railway Group is currently generating about -0.35 per unit of volatility. If you would invest 657.00 in China Railway Group on October 12, 2024 and sell it today you would lose (66.00) from holding China Railway Group or give up 10.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RoadMain T Co vs. China Railway Group
Performance |
| Timeline |
| RoadMain T |
| China Railway Group |
RoadMain T and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RoadMain T and China Railway
The main advantage of trading using opposite RoadMain T and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RoadMain T 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.| RoadMain T vs. Shenzhen Noposion Agrochemicals | RoadMain T vs. Nanning Chemical Industry | RoadMain T vs. Guizhou Chanhen Chemical | RoadMain T vs. Guangzhou Dongfang Hotel |
| China Railway vs. RoadMain T Co | China Railway vs. Jiangsu Broadcasting Cable | China Railway vs. Shanghai Broadband Technology | China Railway vs. Anhui Transport Consulting |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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