Correlation Between China Railway and Shanghai Ziyan
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By analyzing existing cross correlation between China Railway Construction and Shanghai Ziyan Foods, you can compare the effects of market volatilities on China Railway and Shanghai Ziyan 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 Shanghai Ziyan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Shanghai Ziyan.
Diversification Opportunities for China Railway and Shanghai Ziyan
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shanghai is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Shanghai Ziyan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Ziyan 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 Shanghai Ziyan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Ziyan Foods has no effect on the direction of China Railway i.e., China Railway and Shanghai Ziyan go up and down completely randomly.
Pair Corralation between China Railway and Shanghai Ziyan
Assuming the 90 days trading horizon China Railway Construction is expected to generate 0.82 times more return on investment than Shanghai Ziyan. However, China Railway Construction is 1.21 times less risky than Shanghai Ziyan. It trades about 0.06 of its potential returns per unit of risk. Shanghai Ziyan Foods is currently generating about 0.0 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. Shanghai Ziyan Foods
Performance |
| Timeline |
| China Railway Constr |
| Shanghai Ziyan Foods |
China Railway and Shanghai Ziyan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Shanghai Ziyan
The main advantage of trading using opposite China Railway and Shanghai Ziyan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Shanghai Ziyan 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 Shanghai Ziyan will offset losses from the drop in Shanghai Ziyan'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 |
| Shanghai Ziyan vs. Zhejiang Construction Investment | Shanghai Ziyan vs. Fujian Newland Computer | Shanghai Ziyan vs. Kuang Chi Technologies | Shanghai Ziyan vs. Jonjee Hi tech Industrial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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