Correlation Between Heilongjiang Publishing and China Railway
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By analyzing existing cross correlation between Heilongjiang Publishing Media and China Railway Group, you can compare the effects of market volatilities on Heilongjiang Publishing 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 Heilongjiang Publishing with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Publishing and China Railway.
Diversification Opportunities for Heilongjiang Publishing and China Railway
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heilongjiang and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media 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 Heilongjiang Publishing 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 Heilongjiang Publishing Media 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 Heilongjiang Publishing i.e., Heilongjiang Publishing and China Railway go up and down completely randomly.
Pair Corralation between Heilongjiang Publishing and China Railway
Assuming the 90 days trading horizon Heilongjiang Publishing Media is expected to generate 1.83 times more return on investment than China Railway. However, Heilongjiang Publishing is 1.83 times more volatile than China Railway Group. It trades about 0.05 of its potential returns per unit of risk. China Railway Group is currently generating about 0.03 per unit of risk. If you would invest 959.00 in Heilongjiang Publishing Media on September 12, 2024 and sell it today you would earn a total of 739.00 from holding Heilongjiang Publishing Media or generate 77.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Publishing Media vs. China Railway Group
Performance |
| Timeline |
| Heilongjiang Publishing |
| China Railway Group |
Heilongjiang Publishing and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Publishing and China Railway
The main advantage of trading using opposite Heilongjiang Publishing and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Publishing 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.The idea behind Heilongjiang Publishing Media and China Railway Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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