Correlation Between China Railway and Guangzhou Jointas
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By analyzing existing cross correlation between China Railway Construction and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on China Railway and Guangzhou Jointas 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 Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Guangzhou Jointas.
Diversification Opportunities for China Railway and Guangzhou Jointas
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Guangzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas 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 Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of China Railway i.e., China Railway and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between China Railway and Guangzhou Jointas
Assuming the 90 days trading horizon China Railway Construction is expected to under-perform the Guangzhou Jointas. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Construction is 2.7 times less risky than Guangzhou Jointas. The stock trades about -0.19 of its potential returns per unit of risk. The Guangzhou Jointas Chemical is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 547.00 in Guangzhou Jointas Chemical on September 29, 2024 and sell it today you would lose (32.00) from holding Guangzhou Jointas Chemical or give up 5.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Construction vs. Guangzhou Jointas Chemical
Performance |
| Timeline |
| China Railway Constr |
| Guangzhou Jointas |
China Railway and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Guangzhou Jointas
The main advantage of trading using opposite China Railway and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Guangzhou Jointas 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 Guangzhou Jointas will offset losses from the drop in Guangzhou Jointas' long position.| China Railway vs. Bank of China | China Railway vs. Kweichow Moutai Co | China Railway vs. PetroChina Co Ltd | China Railway vs. Bank of Communications |
| Guangzhou Jointas vs. Jiaozuo Wanfang Aluminum | Guangzhou Jointas vs. Ye Chiu Metal | Guangzhou Jointas vs. Western Metal Materials | Guangzhou Jointas vs. Tongyu Communication |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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