Correlation Between China Railway and Hubeiyichang Transportation
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By analyzing existing cross correlation between China Railway Construction and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on China Railway and Hubeiyichang Transportation 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 Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Hubeiyichang Transportation.
Diversification Opportunities for China Railway and Hubeiyichang Transportation
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Hubeiyichang is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation 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 Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of China Railway i.e., China Railway and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between China Railway and Hubeiyichang Transportation
Assuming the 90 days trading horizon China Railway Construction is expected to generate 0.73 times more return on investment than Hubeiyichang Transportation. However, China Railway Construction is 1.37 times less risky than Hubeiyichang Transportation. It trades about 0.08 of its potential returns per unit of risk. Hubeiyichang Transportation Group is currently generating about -0.18 per unit of risk. If you would invest 408.00 in China Railway Construction on November 28, 2024 and sell it today you would earn a total of 5.00 from holding China Railway Construction or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
China Railway Construction vs. Hubeiyichang Transportation Gr
Performance |
| Timeline |
| China Railway Constr |
| Hubeiyichang Transportation |
China Railway and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Hubeiyichang Transportation
The main advantage of trading using opposite China Railway and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.| China Railway vs. Industrial and Commercial | China Railway vs. Agricultural Bank of | China Railway vs. China Construction Bank | China Railway vs. Bank of China |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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