Correlation Between China State and Soochow Securities
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By analyzing existing cross correlation between China State Construction and Soochow Securities Co, you can compare the effects of market volatilities on China State and Soochow Securities 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 Soochow Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Soochow Securities.
Diversification Opportunities for China State and Soochow Securities
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Soochow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Soochow Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soochow Securities 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 Soochow Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soochow Securities has no effect on the direction of China State i.e., China State and Soochow Securities go up and down completely randomly.
Pair Corralation between China State and Soochow Securities
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Soochow Securities. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.35 times less risky than Soochow Securities. The stock trades about -0.1 of its potential returns per unit of risk. The Soochow Securities Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 811.00 in Soochow Securities Co on September 20, 2024 and sell it today you would lose (3.00) from holding Soochow Securities Co or give up 0.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China State Construction vs. Soochow Securities Co
Performance |
Timeline |
China State Construction |
Soochow Securities |
China State and Soochow Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China State and Soochow Securities
The main advantage of trading using opposite China State and Soochow Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Soochow Securities 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 Soochow Securities will offset losses from the drop in Soochow Securities' long position.China State vs. CIMC Vehicles Co | China State vs. Eastern Communications Co | China State vs. Guangzhou Haige Communications | China State vs. Guangdong Shenglu Telecommunication |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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