Correlation Between China Railway and Cangzhou Mingzhu
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By analyzing existing cross correlation between China Railway Construction and Cangzhou Mingzhu Plastic, you can compare the effects of market volatilities on China Railway and Cangzhou Mingzhu 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 Cangzhou Mingzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Cangzhou Mingzhu.
Diversification Opportunities for China Railway and Cangzhou Mingzhu
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Cangzhou is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Cangzhou Mingzhu Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cangzhou Mingzhu Plastic 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 Construction are associated (or correlated) with Cangzhou Mingzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cangzhou Mingzhu Plastic has no effect on the direction of China Railway i.e., China Railway and Cangzhou Mingzhu go up and down completely randomly.
Pair Corralation between China Railway and Cangzhou Mingzhu
Assuming the 90 days trading horizon China Railway Construction is expected to generate 0.35 times more return on investment than Cangzhou Mingzhu. However, China Railway Construction is 2.87 times less risky than Cangzhou Mingzhu. It trades about 0.11 of its potential returns per unit of risk. Cangzhou Mingzhu Plastic is currently generating about 0.02 per unit of risk. If you would invest 916.00 in China Railway Construction on September 25, 2024 and sell it today you would earn a total of 23.00 from holding China Railway Construction or generate 2.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
China Railway Construction vs. Cangzhou Mingzhu Plastic
Performance |
Timeline |
China Railway Constr |
Cangzhou Mingzhu Plastic |
China Railway and Cangzhou Mingzhu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Railway and Cangzhou Mingzhu
The main advantage of trading using opposite China Railway and Cangzhou Mingzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Cangzhou Mingzhu 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 Cangzhou Mingzhu will offset losses from the drop in Cangzhou Mingzhu's long position.China Railway vs. Sihui Fuji Electronics | China Railway vs. LianChuang Electronic Technology | China Railway vs. Anhui Jianghuai Automobile | China Railway vs. Chongqing Changan Automobile |
Cangzhou Mingzhu vs. Zhejiang Kingland Pipeline | Cangzhou Mingzhu vs. Ningbo MedicalSystem Biotechnology | Cangzhou Mingzhu vs. Zoy Home Furnishing | Cangzhou Mingzhu vs. China Railway Construction |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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