Correlation Between China Satellite and New China
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By analyzing existing cross correlation between China Satellite Communications and New China Life, you can compare the effects of market volatilities on China Satellite and New China 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 Satellite with a short position of New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Satellite and New China.
Diversification Opportunities for China Satellite and New China
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and New is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Satellite Communications and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life and China Satellite 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 Satellite Communications are associated (or correlated) with New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of China Satellite i.e., China Satellite and New China go up and down completely randomly.
Pair Corralation between China Satellite and New China
Assuming the 90 days trading horizon China Satellite is expected to generate 1.02 times less return on investment than New China. In addition to that, China Satellite is 1.25 times more volatile than New China Life. It trades about 0.2 of its total potential returns per unit of risk. New China Life is currently generating about 0.26 per unit of volatility. If you would invest 3,195 in New China Life on September 12, 2024 and sell it today you would earn a total of 2,127 from holding New China Life or generate 66.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Satellite Communications vs. New China Life
Performance |
Timeline |
China Satellite Comm |
New China Life |
China Satellite and New China Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Satellite and New China
The main advantage of trading using opposite China Satellite and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Satellite position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.China Satellite vs. Kweichow Moutai Co | China Satellite vs. Shenzhen Mindray Bio Medical | China Satellite vs. G bits Network Technology | China Satellite vs. Beijing Roborock Technology |
New China vs. HeBei Jinniu Chemical | New China vs. Zhejiang Construction Investment | New China vs. Lianhe Chemical Technology | New China vs. Nuode Investment Co |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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