Correlation Between China Securities and Zhuzhou CRRC
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By analyzing existing cross correlation between China Securities 800 and Zhuzhou CRRC Times, you can compare the effects of market volatilities on China Securities and Zhuzhou CRRC 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 Securities with a short position of Zhuzhou CRRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Zhuzhou CRRC.
Diversification Opportunities for China Securities and Zhuzhou CRRC
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Zhuzhou is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Zhuzhou CRRC Times in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhuzhou CRRC Times and China Securities 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 Securities 800 are associated (or correlated) with Zhuzhou CRRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhuzhou CRRC Times has no effect on the direction of China Securities i.e., China Securities and Zhuzhou CRRC go up and down completely randomly.
Pair Corralation between China Securities and Zhuzhou CRRC
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.61 times more return on investment than Zhuzhou CRRC. However, China Securities 800 is 1.63 times less risky than Zhuzhou CRRC. It trades about 0.17 of its potential returns per unit of risk. Zhuzhou CRRC Times is currently generating about 0.06 per unit of risk. If you would invest 341,692 in China Securities 800 on September 23, 2024 and sell it today you would earn a total of 83,962 from holding China Securities 800 or generate 24.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Securities 800 vs. Zhuzhou CRRC Times
Performance |
Timeline |
China Securities and Zhuzhou CRRC Volatility Contrast
Predicted Return Density |
Returns |
China Securities 800
Pair trading matchups for China Securities
Zhuzhou CRRC Times
Pair trading matchups for Zhuzhou CRRC
Pair Trading with China Securities and Zhuzhou CRRC
The main advantage of trading using opposite China Securities and Zhuzhou CRRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Zhuzhou CRRC 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 Zhuzhou CRRC will offset losses from the drop in Zhuzhou CRRC's long position.China Securities vs. Hengdian Entertainment Co | China Securities vs. Peoples Insurance of | China Securities vs. Wasu Media Holding | China Securities vs. Duzhe Publishing Media |
Zhuzhou CRRC vs. Dazhong Transportation Group | Zhuzhou CRRC vs. China Express Airlines | Zhuzhou CRRC vs. Olympic Circuit Technology | Zhuzhou CRRC vs. Hainan Airlines 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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