Correlation Between Zhejiang HISUN and China Railway
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By analyzing existing cross correlation between Zhejiang HISUN Biomaterials and China Railway Materials, you can compare the effects of market volatilities on Zhejiang HISUN 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 Zhejiang HISUN with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang HISUN and China Railway.
Diversification Opportunities for Zhejiang HISUN and China Railway
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhejiang and China is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang HISUN Biomaterials and China Railway Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Materials and Zhejiang HISUN 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 Zhejiang HISUN Biomaterials 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 Materials has no effect on the direction of Zhejiang HISUN i.e., Zhejiang HISUN and China Railway go up and down completely randomly.
Pair Corralation between Zhejiang HISUN and China Railway
Assuming the 90 days trading horizon Zhejiang HISUN Biomaterials is expected to generate 1.28 times more return on investment than China Railway. However, Zhejiang HISUN is 1.28 times more volatile than China Railway Materials. It trades about 0.14 of its potential returns per unit of risk. China Railway Materials is currently generating about 0.14 per unit of risk. If you would invest 1,011 in Zhejiang HISUN Biomaterials on September 5, 2024 and sell it today you would earn a total of 60.00 from holding Zhejiang HISUN Biomaterials or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang HISUN Biomaterials vs. China Railway Materials
Performance |
| Timeline |
| Zhejiang HISUN Bioma |
| China Railway Materials |
Zhejiang HISUN and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang HISUN and China Railway
The main advantage of trading using opposite Zhejiang HISUN and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang HISUN 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.| Zhejiang HISUN vs. Zijin Mining Group | Zhejiang HISUN vs. Wanhua Chemical Group | Zhejiang HISUN vs. Baoshan Iron Steel | Zhejiang HISUN vs. Shandong Gold Mining |
| China Railway vs. Sinosteel Engineering and | China Railway vs. Xiamen Jihong Package | China Railway vs. Youyou Foods Co | China Railway vs. Aofu Environmental Technology |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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