Correlation Between CSX and Guangshen Railway
Can any of the company-specific risk be diversified away by investing in both CSX and Guangshen Railway at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CSX and Guangshen Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSX Corporation and Guangshen Railway, you can compare the effects of market volatilities on CSX and Guangshen Railway 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 CSX with a short position of Guangshen Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSX and Guangshen Railway.
Diversification Opportunities for CSX and Guangshen Railway
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSX and Guangshen is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CSX Corp. and Guangshen Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangshen Railway and CSX 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 CSX Corporation are associated (or correlated) with Guangshen Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangshen Railway has no effect on the direction of CSX i.e., CSX and Guangshen Railway go up and down completely randomly.
Pair Corralation between CSX and Guangshen Railway
If you would invest 3,325 in CSX Corporation on September 5, 2024 and sell it today you would earn a total of 205.00 from holding CSX Corporation or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSX Corp. vs. Guangshen Railway
Performance |
| Timeline |
| CSX Corporation |
| Guangshen Railway |
CSX and Guangshen Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSX and Guangshen Railway
The main advantage of trading using opposite CSX and Guangshen Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSX position performs unexpectedly, Guangshen Railway 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 Guangshen Railway will offset losses from the drop in Guangshen Railway's long position.| CSX vs. Union Pacific | CSX vs. Westinghouse Air Brake | CSX vs. Trinity Industries | CSX vs. Greenbrier Companies |
| Guangshen Railway vs. Trinity Industries | Guangshen Railway vs. CSX Corporation | Guangshen Railway vs. Norfolk Southern | Guangshen Railway vs. Greenbrier Companies |
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 CEOs Directory module to screen CEOs from public companies around the world.
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