Correlation Between China Railway and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between China Railway Construction and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on China Railway and Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Shenzhen Zhongzhuang.
Diversification Opportunities for China Railway and Shenzhen Zhongzhuang
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shenzhen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of China Railway i.e., China Railway and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between China Railway and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon China Railway Construction is expected to generate 0.5 times more return on investment than Shenzhen Zhongzhuang. However, China Railway Construction is 2.0 times less risky than Shenzhen Zhongzhuang. It trades about 0.06 of its potential returns per unit of risk. Shenzhen Zhongzhuang Construction is currently generating about 0.02 per unit of risk. If you would invest 380.00 in China Railway Construction on September 12, 2024 and sell it today you would earn a total of 103.00 from holding China Railway Construction or generate 27.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Construction vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| China Railway Constr |
| Shenzhen Zhongzhuang |
China Railway and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Shenzhen Zhongzhuang
The main advantage of trading using opposite China Railway and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang's long position.| China Railway vs. Guangzhou Restaurants Group | China Railway vs. Jilin Jlu Communication | China Railway vs. Allwin Telecommunication Co | China Railway vs. Sunwave Communications Co |
| Shenzhen Zhongzhuang vs. Heilongjiang Publishing Media | Shenzhen Zhongzhuang vs. Shanghai Action Education | Shenzhen Zhongzhuang vs. Time Publishing and | Shenzhen Zhongzhuang vs. CITIC Guoan Information |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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