Correlation Between Dazhong Transportation and CGN Nuclear
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By analyzing existing cross correlation between Dazhong Transportation Group and CGN Nuclear Technology, you can compare the effects of market volatilities on Dazhong Transportation and CGN Nuclear 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 Dazhong Transportation with a short position of CGN Nuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and CGN Nuclear.
Diversification Opportunities for Dazhong Transportation and CGN Nuclear
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dazhong and CGN is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group and CGN Nuclear Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN Nuclear Technology and Dazhong Transportation 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 Dazhong Transportation Group are associated (or correlated) with CGN Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN Nuclear Technology has no effect on the direction of Dazhong Transportation i.e., Dazhong Transportation and CGN Nuclear go up and down completely randomly.
Pair Corralation between Dazhong Transportation and CGN Nuclear
Assuming the 90 days trading horizon Dazhong Transportation Group is expected to under-perform the CGN Nuclear. But the stock apears to be less risky and, when comparing its historical volatility, Dazhong Transportation Group is 1.32 times less risky than CGN Nuclear. The stock trades about -0.24 of its potential returns per unit of risk. The CGN Nuclear Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 731.00 in CGN Nuclear Technology on January 25, 2025 and sell it today you would earn a total of 1.00 from holding CGN Nuclear Technology or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dazhong Transportation Group vs. CGN Nuclear Technology
Performance |
| Timeline |
| Dazhong Transportation |
| CGN Nuclear Technology |
Dazhong Transportation and CGN Nuclear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dazhong Transportation and CGN Nuclear
The main advantage of trading using opposite Dazhong Transportation and CGN Nuclear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation position performs unexpectedly, CGN Nuclear 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 CGN Nuclear will offset losses from the drop in CGN Nuclear's long position.The idea behind Dazhong Transportation Group and CGN Nuclear Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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