Correlation Between Suzhou Weizhixiang and China Railway

Can any of the company-specific risk be diversified away by investing in both Suzhou Weizhixiang and China Railway at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Suzhou Weizhixiang and China Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Suzhou Weizhixiang Food and China Railway Tielong, you can compare the effects of market volatilities on Suzhou Weizhixiang 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 Suzhou Weizhixiang with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Weizhixiang and China Railway.

Diversification Opportunities for Suzhou Weizhixiang and China Railway

0.0

Correlation Coefficient

Suzhou Weizhixiang  China Railway

Pay attention - limited upside

The 3 months correlation between Suzhou and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Weizhixiang Food and China Railway Tielong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Tielong and Suzhou Weizhixiang 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 Suzhou Weizhixiang Food 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 Tielong has no effect on the direction of Suzhou Weizhixiang i.e., Suzhou Weizhixiang and China Railway go up and down completely randomly.

Pair Corralation between Suzhou Weizhixiang and China Railway

If you would invest  2,150  in Suzhou Weizhixiang Food on October 26, 2024 and sell it today you would earn a total of  178.00  from holding Suzhou Weizhixiang Food or generate 8.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Suzhou Weizhixiang Food  vs.  China Railway Tielong

Suzhou Weizhixiang Food

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Suzhou Weizhixiang Food are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Suzhou Weizhixiang may actually be approaching a critical reversion point that can send shares even higher in February 2025.

China Railway Tielong

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Railway Tielong has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, China Railway is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Suzhou Weizhixiang and China Railway

The main advantage of trading using opposite Suzhou Weizhixiang and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Weizhixiang 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.

The idea behind Suzhou Weizhixiang Food and China Railway Tielong pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..