Correlation Between China Union and China Shenhua
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By analyzing existing cross correlation between China Union Holdings and China Shenhua Energy, you can compare the effects of market volatilities on China Union and China Shenhua 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 Union with a short position of China Shenhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Union and China Shenhua.
Diversification Opportunities for China Union and China Shenhua
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and China is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding China Union Holdings and China Shenhua Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Shenhua Energy and China Union 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 Union Holdings are associated (or correlated) with China Shenhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Shenhua Energy has no effect on the direction of China Union i.e., China Union and China Shenhua go up and down completely randomly.
Pair Corralation between China Union and China Shenhua
Assuming the 90 days trading horizon China Union Holdings is expected to under-perform the China Shenhua. In addition to that, China Union is 1.39 times more volatile than China Shenhua Energy. It trades about -0.44 of its total potential returns per unit of risk. China Shenhua Energy is currently generating about 0.1 per unit of volatility. If you would invest 4,011 in China Shenhua Energy on September 24, 2024 and sell it today you would earn a total of 123.00 from holding China Shenhua Energy or generate 3.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
China Union Holdings vs. China Shenhua Energy
Performance |
Timeline |
China Union Holdings |
China Shenhua Energy |
China Union and China Shenhua Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Union and China Shenhua
The main advantage of trading using opposite China Union and China Shenhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Union position performs unexpectedly, China Shenhua 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 China Shenhua will offset losses from the drop in China Shenhua's long position.China Union vs. PetroChina Co Ltd | China Union vs. China Mobile Limited | China Union vs. CNOOC Limited | China Union vs. Ping An Insurance |
China Shenhua vs. Zhejiang Kingland Pipeline | China Shenhua vs. Elite Color Environmental | China Shenhua vs. Shanghai Construction Group | China Shenhua vs. Keeson Technology Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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