Correlation Between China Railway and Tieling Newcity
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By analyzing existing cross correlation between China Railway Materials and Tieling Newcity Investment, you can compare the effects of market volatilities on China Railway and Tieling Newcity 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 Tieling Newcity. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Tieling Newcity.
Diversification Opportunities for China Railway and Tieling Newcity
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Tieling is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Materials and Tieling Newcity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tieling Newcity Inve 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 Materials are associated (or correlated) with Tieling Newcity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tieling Newcity Inve has no effect on the direction of China Railway i.e., China Railway and Tieling Newcity go up and down completely randomly.
Pair Corralation between China Railway and Tieling Newcity
Assuming the 90 days trading horizon China Railway is expected to generate 1.67 times less return on investment than Tieling Newcity. In addition to that, China Railway is 1.07 times more volatile than Tieling Newcity Investment. It trades about 0.21 of its total potential returns per unit of risk. Tieling Newcity Investment is currently generating about 0.38 per unit of volatility. If you would invest 198.00 in Tieling Newcity Investment on September 14, 2024 and sell it today you would earn a total of 117.00 from holding Tieling Newcity Investment or generate 59.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Railway Materials vs. Tieling Newcity Investment
Performance |
Timeline |
China Railway Materials |
Tieling Newcity Inve |
China Railway and Tieling Newcity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Railway and Tieling Newcity
The main advantage of trading using opposite China Railway and Tieling Newcity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Tieling Newcity 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 Tieling Newcity will offset losses from the drop in Tieling Newcity's long position.China Railway vs. Cambricon Technologies Corp | China Railway vs. Loongson Technology Corp | China Railway vs. Shenzhen Fortune Trend | China Railway vs. Chongqing Road Bridge |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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