Correlation Between Superior Plus and China Railway
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and China Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and China Railway Group, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and China Railway.
Diversification Opportunities for Superior Plus and China Railway
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Superior and China is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group and Superior Plus 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 Superior Plus Corp 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 Group has no effect on the direction of Superior Plus i.e., Superior Plus and China Railway go up and down completely randomly.
Pair Corralation between Superior Plus and China Railway
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the China Railway. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 2.61 times less risky than China Railway. The stock trades about -0.02 of its potential returns per unit of risk. The China Railway Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 19.00 in China Railway Group on December 2, 2024 and sell it today you would earn a total of 29.00 from holding China Railway Group or generate 152.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Superior Plus Corp vs. China Railway Group
Performance |
Timeline |
Superior Plus Corp |
China Railway Group |
Superior Plus and China Railway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Superior Plus and China Railway
The main advantage of trading using opposite Superior Plus and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.Superior Plus vs. Indutrade AB | Superior Plus vs. Tower One Wireless | Superior Plus vs. OFFICE DEPOT | Superior Plus vs. alstria office REIT AG |
China Railway vs. Coeur Mining | China Railway vs. CORNISH METALS INC | China Railway vs. Scandinavian Tobacco Group | China Railway vs. Harmony Gold Mining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |