Correlation Between China National and Orient Sec
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By analyzing existing cross correlation between China National Software and Orient Sec Co, you can compare the effects of market volatilities on China National and Orient Sec 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 National with a short position of Orient Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and Orient Sec.
Diversification Opportunities for China National and Orient Sec
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Orient is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding China National Software and Orient Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Sec and China National 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 National Software are associated (or correlated) with Orient Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Sec has no effect on the direction of China National i.e., China National and Orient Sec go up and down completely randomly.
Pair Corralation between China National and Orient Sec
Assuming the 90 days trading horizon China National Software is expected to under-perform the Orient Sec. In addition to that, China National is 1.14 times more volatile than Orient Sec Co. It trades about -0.11 of its total potential returns per unit of risk. Orient Sec Co is currently generating about 0.04 per unit of volatility. If you would invest 1,032 in Orient Sec Co on September 25, 2024 and sell it today you would earn a total of 13.00 from holding Orient Sec Co or generate 1.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China National Software vs. Orient Sec Co
Performance |
Timeline |
China National Software |
Orient Sec |
China National and Orient Sec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China National and Orient Sec
The main advantage of trading using opposite China National and Orient Sec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, Orient Sec 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 Orient Sec will offset losses from the drop in Orient Sec's long position.China National vs. Industrial and Commercial | China National vs. Agricultural Bank of | China National vs. China Construction Bank | China National vs. Bank of China |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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