Correlation Between China Railway and Strait Innovation
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By analyzing existing cross correlation between China Railway Group and Strait Innovation Internet, you can compare the effects of market volatilities on China Railway and Strait Innovation 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 Strait Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Strait Innovation.
Diversification Opportunities for China Railway and Strait Innovation
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Strait is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Strait Innovation Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strait Innovation 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 Group are associated (or correlated) with Strait Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strait Innovation has no effect on the direction of China Railway i.e., China Railway and Strait Innovation go up and down completely randomly.
Pair Corralation between China Railway and Strait Innovation
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Strait Innovation. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 2.64 times less risky than Strait Innovation. The stock trades about -0.11 of its potential returns per unit of risk. The Strait Innovation Internet is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 236.00 in Strait Innovation Internet on October 24, 2024 and sell it today you would earn a total of 42.00 from holding Strait Innovation Internet or generate 17.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Railway Group vs. Strait Innovation Internet
Performance |
Timeline |
China Railway Group |
Strait Innovation |
China Railway and Strait Innovation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Railway and Strait Innovation
The main advantage of trading using opposite China Railway and Strait Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Strait Innovation 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 Strait Innovation will offset losses from the drop in Strait Innovation's long position.China Railway vs. Ningbo Homelink Eco iTech | China Railway vs. Dongfeng Automobile Co | China Railway vs. Quectel Wireless Solutions | China Railway vs. Runjian Communication Co |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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