Correlation Between China Railway and Wuliangye Yibin
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By analyzing existing cross correlation between China Railway Construction and Wuliangye Yibin Co, you can compare the effects of market volatilities on China Railway and Wuliangye Yibin 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 China Railway with a short position of Wuliangye Yibin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Wuliangye Yibin.
Diversification Opportunities for China Railway and Wuliangye Yibin
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Wuliangye is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Wuliangye Yibin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuliangye Yibin and China Railway 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 China Railway Construction are associated (or correlated) with Wuliangye Yibin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuliangye Yibin has no effect on the direction of China Railway i.e., China Railway and Wuliangye Yibin go up and down completely randomly.
Pair Corralation between China Railway and Wuliangye Yibin
Assuming the 90 days trading horizon China Railway Construction is expected to generate 0.83 times more return on investment than Wuliangye Yibin. However, China Railway Construction is 1.2 times less risky than Wuliangye Yibin. It trades about 0.1 of its potential returns per unit of risk. Wuliangye Yibin Co is currently generating about 0.03 per unit of risk. If you would invest 378.00 in China Railway Construction on September 1, 2024 and sell it today you would earn a total of 98.00 from holding China Railway Construction or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
China Railway Construction vs. Wuliangye Yibin Co
Performance |
| Timeline |
| China Railway Constr |
| Wuliangye Yibin |
China Railway and Wuliangye Yibin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Wuliangye Yibin
The main advantage of trading using opposite China Railway and Wuliangye Yibin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Wuliangye Yibin 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 Wuliangye Yibin will offset losses from the drop in Wuliangye Yibin's long position.| China Railway vs. Longjian Road Bridge | China Railway vs. Tibet Huayu Mining | China Railway vs. Heilongjiang Transport Development | China Railway vs. Yunnan Xiyi Industrial |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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