Correlation Between Guangzhou Dongfang and Jiangsu Pacific
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Jiangsu Pacific Quartz, you can compare the effects of market volatilities on Guangzhou Dongfang and Jiangsu Pacific 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 Guangzhou Dongfang with a short position of Jiangsu Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Jiangsu Pacific.
Diversification Opportunities for Guangzhou Dongfang and Jiangsu Pacific
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Jiangsu is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Jiangsu Pacific Quartz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Pacific Quartz and Guangzhou Dongfang 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 Guangzhou Dongfang Hotel are associated (or correlated) with Jiangsu Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Pacific Quartz has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Jiangsu Pacific go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Jiangsu Pacific
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to generate 0.84 times more return on investment than Jiangsu Pacific. However, Guangzhou Dongfang Hotel is 1.18 times less risky than Jiangsu Pacific. It trades about 0.0 of its potential returns per unit of risk. Jiangsu Pacific Quartz is currently generating about -0.07 per unit of risk. If you would invest 1,185 in Guangzhou Dongfang Hotel on October 29, 2024 and sell it today you would lose (236.00) from holding Guangzhou Dongfang Hotel or give up 19.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Jiangsu Pacific Quartz
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Jiangsu Pacific Quartz |
Guangzhou Dongfang and Jiangsu Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Jiangsu Pacific
The main advantage of trading using opposite Guangzhou Dongfang and Jiangsu Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Jiangsu Pacific 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 Jiangsu Pacific will offset losses from the drop in Jiangsu Pacific's long position.| Guangzhou Dongfang vs. Orinko Advanced Plastics | Guangzhou Dongfang vs. Montage Technology Co | Guangzhou Dongfang vs. Western Metal Materials | Guangzhou Dongfang vs. Advanced Technology Materials |
| Jiangsu Pacific vs. Winner Medical Co | Jiangsu Pacific vs. Hengkang Medical Group | Jiangsu Pacific vs. Xiangyu Medical Co | Jiangsu Pacific vs. Eyebright Medical Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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