Correlation Between Anhui Jianghuai and China Railway
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and China Railway Construction, you can compare the effects of market volatilities on Anhui Jianghuai and China Railway 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 Anhui Jianghuai with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and China Railway.
Diversification Opportunities for Anhui Jianghuai and China Railway
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anhui and China is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Anhui Jianghuai 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 Anhui Jianghuai Automobile are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and China Railway go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and China Railway
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to under-perform the China Railway. In addition to that, Anhui Jianghuai is 3.02 times more volatile than China Railway Construction. It trades about -0.03 of its total potential returns per unit of risk. China Railway Construction is currently generating about 0.08 per unit of volatility. If you would invest 916.00 in China Railway Construction on September 24, 2024 and sell it today you would earn a total of 16.00 from holding China Railway Construction or generate 1.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Anhui Jianghuai Automobile vs. China Railway Construction
Performance |
Timeline |
Anhui Jianghuai Auto |
China Railway Constr |
Anhui Jianghuai and China Railway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anhui Jianghuai and China Railway
The main advantage of trading using opposite Anhui Jianghuai and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.Anhui Jianghuai vs. Nanjing Medlander Medical | Anhui Jianghuai vs. Ningbo MedicalSystem Biotechnology | Anhui Jianghuai vs. Do Fluoride Chemicals Co | Anhui Jianghuai vs. Southchip Semiconductor Technology |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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