Correlation Between Changchun High and Guangdong Skychem
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By analyzing existing cross correlation between Changchun High New and Guangdong Skychem Technology, you can compare the effects of market volatilities on Changchun High and Guangdong Skychem 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 Changchun High with a short position of Guangdong Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun High and Guangdong Skychem.
Diversification Opportunities for Changchun High and Guangdong Skychem
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Guangdong is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Changchun High New and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem and Changchun High 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 Changchun High New are associated (or correlated) with Guangdong Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of Changchun High i.e., Changchun High and Guangdong Skychem go up and down completely randomly.
Pair Corralation between Changchun High and Guangdong Skychem
Assuming the 90 days trading horizon Changchun High is expected to generate 7.19 times less return on investment than Guangdong Skychem. But when comparing it to its historical volatility, Changchun High New is 1.52 times less risky than Guangdong Skychem. It trades about 0.04 of its potential returns per unit of risk. Guangdong Skychem Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,221 in Guangdong Skychem Technology on September 26, 2024 and sell it today you would earn a total of 7,234 from holding Guangdong Skychem Technology or generate 138.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun High New vs. Guangdong Skychem Technology
Performance |
| Timeline |
| Changchun High New |
| Guangdong Skychem |
Changchun High and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun High and Guangdong Skychem
The main advantage of trading using opposite Changchun High and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun High position performs unexpectedly, Guangdong Skychem 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 Guangdong Skychem will offset losses from the drop in Guangdong Skychem's long position.| Changchun High vs. Jiangsu Xinri E Vehicle | Changchun High vs. CIMC Vehicles Co | Changchun High vs. Guangzhou Ruoyuchen Information | Changchun High vs. Jiugui Liquor Co |
| Guangdong Skychem vs. Industrial and Commercial | Guangdong Skychem vs. Kweichow Moutai Co | Guangdong Skychem vs. Agricultural Bank of | Guangdong Skychem vs. China Mobile Limited |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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