Correlation Between Chengdu Xingrong and Hangzhou Guotai
Specify exactly 2 symbols:
By analyzing existing cross correlation between Chengdu Xingrong Investment and Hangzhou Guotai Environmental, you can compare the effects of market volatilities on Chengdu Xingrong and Hangzhou Guotai 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 Chengdu Xingrong with a short position of Hangzhou Guotai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xingrong and Hangzhou Guotai.
Diversification Opportunities for Chengdu Xingrong and Hangzhou Guotai
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chengdu and Hangzhou is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xingrong Investment and Hangzhou Guotai Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Guotai Envi and Chengdu Xingrong 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 Chengdu Xingrong Investment are associated (or correlated) with Hangzhou Guotai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Guotai Envi has no effect on the direction of Chengdu Xingrong i.e., Chengdu Xingrong and Hangzhou Guotai go up and down completely randomly.
Pair Corralation between Chengdu Xingrong and Hangzhou Guotai
Assuming the 90 days trading horizon Chengdu Xingrong is expected to generate 7.34 times less return on investment than Hangzhou Guotai. But when comparing it to its historical volatility, Chengdu Xingrong Investment is 1.7 times less risky than Hangzhou Guotai. It trades about 0.01 of its potential returns per unit of risk. Hangzhou Guotai Environmental is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,115 in Hangzhou Guotai Environmental on November 7, 2024 and sell it today you would earn a total of 55.00 from holding Hangzhou Guotai Environmental or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xingrong Investment vs. Hangzhou Guotai Environmental
Performance |
| Timeline |
| Chengdu Xingrong Inv |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hangzhou Guotai Envi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Chengdu Xingrong and Hangzhou Guotai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xingrong and Hangzhou Guotai
The main advantage of trading using opposite Chengdu Xingrong and Hangzhou Guotai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xingrong position performs unexpectedly, Hangzhou Guotai 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 Hangzhou Guotai will offset losses from the drop in Hangzhou Guotai's long position.The idea behind Chengdu Xingrong Investment and Hangzhou Guotai Environmental 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |