Correlation Between China Railway and Focus Media
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By analyzing existing cross correlation between China Railway Construction and Focus Media Information, you can compare the effects of market volatilities on China Railway and Focus Media 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 Focus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Focus Media.
Diversification Opportunities for China Railway and Focus Media
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Focus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Focus Media Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Media Information 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 Focus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Media Information has no effect on the direction of China Railway i.e., China Railway and Focus Media go up and down completely randomly.
Pair Corralation between China Railway and Focus Media
Assuming the 90 days trading horizon China Railway is expected to generate 1.19 times less return on investment than Focus Media. But when comparing it to its historical volatility, China Railway Construction is 1.05 times less risky than Focus Media. It trades about 0.03 of its potential returns per unit of risk. Focus Media Information is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 563.00 in Focus Media Information on August 28, 2024 and sell it today you would earn a total of 131.00 from holding Focus Media Information or generate 23.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Construction vs. Focus Media Information
Performance |
| Timeline |
| China Railway Constr |
| Focus Media Information |
China Railway and Focus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Focus Media
The main advantage of trading using opposite China Railway and Focus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Focus Media 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 Focus Media will offset losses from the drop in Focus Media's long position.| China Railway vs. Biwin Storage Technology | China Railway vs. PetroChina Co Ltd | China Railway vs. Industrial and Commercial | China Railway vs. China Construction Bank |
| Focus Media vs. Agricultural Bank of | Focus Media vs. Industrial and Commercial | Focus Media vs. Bank of China | Focus Media 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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