Correlation Between Guotai Epoint and China Railway
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By analyzing existing cross correlation between Guotai Epoint Software and China Railway Construction, you can compare the effects of market volatilities on Guotai Epoint 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 Guotai Epoint with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guotai Epoint and China Railway.
Diversification Opportunities for Guotai Epoint and China Railway
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guotai and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Guotai Epoint Software and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Guotai Epoint 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 Guotai Epoint Software 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 Constr has no effect on the direction of Guotai Epoint i.e., Guotai Epoint and China Railway go up and down completely randomly.
Pair Corralation between Guotai Epoint and China Railway
Assuming the 90 days trading horizon Guotai Epoint Software is expected to under-perform the China Railway. In addition to that, Guotai Epoint is 1.38 times more volatile than China Railway Construction. It trades about -0.54 of its total potential returns per unit of risk. China Railway Construction is currently generating about -0.34 per unit of volatility. If you would invest 917.00 in China Railway Construction on October 14, 2024 and sell it today you would lose (80.00) from holding China Railway Construction or give up 8.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guotai Epoint Software vs. China Railway Construction
Performance |
| Timeline |
| Guotai Epoint Software |
| China Railway Constr |
Guotai Epoint and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guotai Epoint and China Railway
The main advantage of trading using opposite Guotai Epoint and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guotai Epoint 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.| Guotai Epoint vs. Panda Financial Holding | Guotai Epoint vs. China Everbright Bank | Guotai Epoint vs. Qilu Bank Co | Guotai Epoint vs. China Sports Industry |
| China Railway vs. Guotai Epoint Software | China Railway vs. Invengo Information Technology | China Railway vs. Shenzhen SDG Information | China Railway vs. Glodon Software Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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