Correlation Between China Railway and Cultural Investment
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By analyzing existing cross correlation between China Railway Construction and Cultural Investment Holdings, you can compare the effects of market volatilities on China Railway and Cultural Investment 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 Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Cultural Investment.
Diversification Opportunities for China Railway and Cultural Investment
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Cultural is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment 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 Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of China Railway i.e., China Railway and Cultural Investment go up and down completely randomly.
Pair Corralation between China Railway and Cultural Investment
Assuming the 90 days trading horizon China Railway is expected to generate 2.13 times less return on investment than Cultural Investment. But when comparing it to its historical volatility, China Railway Construction is 1.38 times less risky than Cultural Investment. It trades about 0.08 of its potential returns per unit of risk. Cultural Investment Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Cultural Investment Holdings on October 7, 2024 and sell it today you would earn a total of 73.00 from holding Cultural Investment Holdings or generate 52.52% 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. Cultural Investment Holdings
Performance |
| Timeline |
| China Railway Constr |
| Cultural Investment |
China Railway and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Cultural Investment
The main advantage of trading using opposite China Railway and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| China Railway vs. Penyao Environmental Protection | China Railway vs. Huatian Hotel Group | China Railway vs. Qiaoyin Environmental Tech | China Railway vs. Hangzhou Guotai Environmental |
| Cultural Investment vs. China Life Insurance | Cultural Investment vs. Cinda Securities Co | Cultural Investment vs. Piotech Inc A | Cultural Investment vs. Dongxing Sec Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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