Correlation Between Maoming Petro and Guangzhou KDT
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Guangzhou KDT Machinery, you can compare the effects of market volatilities on Maoming Petro and Guangzhou KDT 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 Maoming Petro with a short position of Guangzhou KDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Guangzhou KDT.
Diversification Opportunities for Maoming Petro and Guangzhou KDT
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maoming and Guangzhou is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Guangzhou KDT Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KDT Machinery and Maoming Petro 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 Maoming Petro Chemical Shihua are associated (or correlated) with Guangzhou KDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KDT Machinery has no effect on the direction of Maoming Petro i.e., Maoming Petro and Guangzhou KDT go up and down completely randomly.
Pair Corralation between Maoming Petro and Guangzhou KDT
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to under-perform the Guangzhou KDT. In addition to that, Maoming Petro is 1.72 times more volatile than Guangzhou KDT Machinery. It trades about -0.32 of its total potential returns per unit of risk. Guangzhou KDT Machinery is currently generating about -0.47 per unit of volatility. If you would invest 1,886 in Guangzhou KDT Machinery on October 12, 2024 and sell it today you would lose (265.00) from holding Guangzhou KDT Machinery or give up 14.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Guangzhou KDT Machinery
Performance |
| Timeline |
| Maoming Petro Chemical |
| Guangzhou KDT Machinery |
Maoming Petro and Guangzhou KDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Guangzhou KDT
The main advantage of trading using opposite Maoming Petro and Guangzhou KDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Guangzhou KDT 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 KDT will offset losses from the drop in Guangzhou KDT's long position.| Maoming Petro vs. Tongxing Environmental Protection | Maoming Petro vs. Innovative Medical Management | Maoming Petro vs. Xiangyu Medical Co | Maoming Petro vs. Shandong Iron and |
| Guangzhou KDT vs. Elite Color Environmental | Guangzhou KDT vs. Central Plains Environment | Guangzhou KDT vs. Changjiang Jinggong Steel | Guangzhou KDT vs. Hangzhou Guotai Environmental |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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