Correlation Between China Railway and Gan Yuan
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By analyzing existing cross correlation between China Railway Construction and Gan Yuan Foods, you can compare the effects of market volatilities on China Railway and Gan Yuan 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 Gan Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Gan Yuan.
Diversification Opportunities for China Railway and Gan Yuan
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Gan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Gan Yuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Yuan Foods 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 Gan Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Yuan Foods has no effect on the direction of China Railway i.e., China Railway and Gan Yuan go up and down completely randomly.
Pair Corralation between China Railway and Gan Yuan
Assuming the 90 days trading horizon China Railway is expected to generate 1.0 times less return on investment than Gan Yuan. But when comparing it to its historical volatility, China Railway Construction is 1.36 times less risky than Gan Yuan. It trades about 0.06 of its potential returns per unit of risk. Gan Yuan Foods is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,687 in Gan Yuan Foods on September 12, 2024 and sell it today you would earn a total of 1,506 from holding Gan Yuan Foods or generate 22.52% 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. Gan Yuan Foods
Performance |
| Timeline |
| China Railway Constr |
| Gan Yuan Foods |
China Railway and Gan Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Gan Yuan
The main advantage of trading using opposite China Railway and Gan Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Gan Yuan 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 Gan Yuan will offset losses from the drop in Gan Yuan's long position.| China Railway vs. Agricultural Bank of | China Railway vs. Industrial and Commercial | China Railway vs. Bank of China | China Railway vs. PetroChina Co Ltd |
| Gan Yuan vs. Maxvision Technology Corp | Gan Yuan vs. Eastroc Beverage Group | Gan Yuan vs. Changchun Faway Automobile | Gan Yuan vs. ROPEOK Technology Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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