Correlation Between Railway Signal and Bengang Steel
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By analyzing existing cross correlation between Railway Signal Communication and Bengang Steel Plates, you can compare the effects of market volatilities on Railway Signal and Bengang Steel 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 Railway Signal with a short position of Bengang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Railway Signal and Bengang Steel.
Diversification Opportunities for Railway Signal and Bengang Steel
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Railway and Bengang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Railway Signal Communication and Bengang Steel Plates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bengang Steel Plates and Railway Signal 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 Railway Signal Communication are associated (or correlated) with Bengang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bengang Steel Plates has no effect on the direction of Railway Signal i.e., Railway Signal and Bengang Steel go up and down completely randomly.
Pair Corralation between Railway Signal and Bengang Steel
Assuming the 90 days trading horizon Railway Signal Communication is expected to generate 0.98 times more return on investment than Bengang Steel. However, Railway Signal Communication is 1.02 times less risky than Bengang Steel. It trades about 0.06 of its potential returns per unit of risk. Bengang Steel Plates is currently generating about -0.15 per unit of risk. If you would invest 622.00 in Railway Signal Communication on September 2, 2024 and sell it today you would earn a total of 14.00 from holding Railway Signal Communication or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Railway Signal Communication vs. Bengang Steel Plates
Performance |
| Timeline |
| Railway Signal Commu |
| Bengang Steel Plates |
Railway Signal and Bengang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Railway Signal and Bengang Steel
The main advantage of trading using opposite Railway Signal and Bengang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Railway Signal position performs unexpectedly, Bengang Steel 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 Bengang Steel will offset losses from the drop in Bengang Steel's long position.| Railway Signal vs. Nanjing Putian Telecommunications | Railway Signal vs. Shenzhen Hifuture Electric | Railway Signal vs. Tianjin Realty Development | Railway Signal vs. Shenyang Huitian Thermal |
| Bengang Steel vs. Heren Health Co | Bengang Steel vs. Impulse Qingdao Health | Bengang Steel vs. Railway Signal Communication | Bengang Steel vs. Lotus Health Group |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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