Correlation Between China State and China Resources
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By analyzing existing cross correlation between China State Construction and China Resources Sanjiu, you can compare the effects of market volatilities on China State and China Resources 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 State with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and China Resources.
Diversification Opportunities for China State and China Resources
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and China Resources Sanjiu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Sanjiu and China State 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 State Construction are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Sanjiu has no effect on the direction of China State i.e., China State and China Resources go up and down completely randomly.
Pair Corralation between China State and China Resources
Assuming the 90 days trading horizon China State Construction is expected to under-perform the China Resources. In addition to that, China State is 1.01 times more volatile than China Resources Sanjiu. It trades about -0.1 of its total potential returns per unit of risk. China Resources Sanjiu is currently generating about -0.07 per unit of volatility. If you would invest 4,536 in China Resources Sanjiu on October 6, 2024 and sell it today you would lose (234.00) from holding China Resources Sanjiu or give up 5.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.73% |
Values | Daily Returns |
China State Construction vs. China Resources Sanjiu
Performance |
Timeline |
China State Construction |
China Resources Sanjiu |
China State and China Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China State and China Resources
The main advantage of trading using opposite China State and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, China Resources 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 Resources will offset losses from the drop in China Resources' long position.China State vs. Shenzhen Shenbao Industrial | China State vs. Dazhong Transportation Group | China State vs. Western Metal Materials | China State vs. Universal Scientific Industrial |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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