Correlation Between ChengDu Hi and Guangzhou Haige
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By analyzing existing cross correlation between ChengDu Hi Tech Development and Guangzhou Haige Communications, you can compare the effects of market volatilities on ChengDu Hi and Guangzhou Haige 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 Hi with a short position of Guangzhou Haige. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChengDu Hi and Guangzhou Haige.
Diversification Opportunities for ChengDu Hi and Guangzhou Haige
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ChengDu and Guangzhou is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ChengDu Hi Tech Development and Guangzhou Haige Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haige Comm and ChengDu Hi 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 Hi Tech Development are associated (or correlated) with Guangzhou Haige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haige Comm has no effect on the direction of ChengDu Hi i.e., ChengDu Hi and Guangzhou Haige go up and down completely randomly.
Pair Corralation between ChengDu Hi and Guangzhou Haige
Assuming the 90 days trading horizon ChengDu Hi Tech Development is expected to generate 1.63 times more return on investment than Guangzhou Haige. However, ChengDu Hi is 1.63 times more volatile than Guangzhou Haige Communications. It trades about 0.09 of its potential returns per unit of risk. Guangzhou Haige Communications is currently generating about 0.03 per unit of risk. If you would invest 1,324 in ChengDu Hi Tech Development on October 12, 2024 and sell it today you would earn a total of 3,707 from holding ChengDu Hi Tech Development or generate 279.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChengDu Hi Tech Development vs. Guangzhou Haige Communications
Performance |
| Timeline |
| ChengDu Hi Tech |
| Guangzhou Haige Comm |
ChengDu Hi and Guangzhou Haige Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChengDu Hi and Guangzhou Haige
The main advantage of trading using opposite ChengDu Hi and Guangzhou Haige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChengDu Hi position performs unexpectedly, Guangzhou Haige 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 Guangzhou Haige will offset losses from the drop in Guangzhou Haige's long position.| ChengDu Hi vs. China Reform Health | ChengDu Hi vs. Shandong Sinoglory Health | ChengDu Hi vs. Xiamen Jihong Package | ChengDu Hi vs. Humanwell Healthcare Group |
| Guangzhou Haige vs. Xinhua Winshare Publishing | Guangzhou Haige vs. Invengo Information Technology | Guangzhou Haige vs. Zhongfu Information | Guangzhou Haige vs. State Grid InformationCommunication |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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