Correlation Between Railway Signal and China Asset
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By analyzing existing cross correlation between Railway Signal Communication and China Asset Management, you can compare the effects of market volatilities on Railway Signal and China Asset 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 China Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Railway Signal and China Asset.
Diversification Opportunities for Railway Signal and China Asset
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Railway and China is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Railway Signal Communication and China Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Asset Management 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 China Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Asset Management has no effect on the direction of Railway Signal i.e., Railway Signal and China Asset go up and down completely randomly.
Pair Corralation between Railway Signal and China Asset
Assuming the 90 days trading horizon Railway Signal Communication is expected to under-perform the China Asset. But the stock apears to be less risky and, when comparing its historical volatility, Railway Signal Communication is 1.12 times less risky than China Asset. The stock trades about -0.16 of its potential returns per unit of risk. The China Asset Management is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 323.00 in China Asset Management on September 13, 2024 and sell it today you would earn a total of 18.00 from holding China Asset Management or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Railway Signal Communication vs. China Asset Management
Performance |
| Timeline |
| Railway Signal Commu |
| China Asset Management |
Railway Signal and China Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Railway Signal and China Asset
The main advantage of trading using opposite Railway Signal and China Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Railway Signal position performs unexpectedly, China Asset 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 Asset will offset losses from the drop in China Asset's long position.| Railway Signal vs. Ming Yang Smart | Railway Signal vs. 159681 | Railway Signal vs. 159005 | Railway Signal vs. Loctek Ergonomic Technology |
| China Asset vs. Kweichow Moutai Co | China Asset vs. Agricultural Bank of | China Asset vs. China Mobile Limited | China Asset vs. China Construction Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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