Correlation Between Guocheng Mining and Xiangtan Electrochemical
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By analyzing existing cross correlation between Guocheng Mining Co and Xiangtan Electrochemical Scientific, you can compare the effects of market volatilities on Guocheng Mining and Xiangtan Electrochemical 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 Guocheng Mining with a short position of Xiangtan Electrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and Xiangtan Electrochemical.
Diversification Opportunities for Guocheng Mining and Xiangtan Electrochemical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guocheng and Xiangtan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining Co and Xiangtan Electrochemical Scien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangtan Electrochemical and Guocheng Mining 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 Guocheng Mining Co are associated (or correlated) with Xiangtan Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangtan Electrochemical has no effect on the direction of Guocheng Mining i.e., Guocheng Mining and Xiangtan Electrochemical go up and down completely randomly.
Pair Corralation between Guocheng Mining and Xiangtan Electrochemical
Assuming the 90 days trading horizon Guocheng Mining Co is expected to generate 1.5 times more return on investment than Xiangtan Electrochemical. However, Guocheng Mining is 1.5 times more volatile than Xiangtan Electrochemical Scientific. It trades about -0.01 of its potential returns per unit of risk. Xiangtan Electrochemical Scientific is currently generating about -0.11 per unit of risk. If you would invest 1,223 in Guocheng Mining Co on October 11, 2024 and sell it today you would lose (64.00) from holding Guocheng Mining Co or give up 5.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guocheng Mining Co vs. Xiangtan Electrochemical Scien
Performance |
Timeline |
Guocheng Mining |
Xiangtan Electrochemical |
Guocheng Mining and Xiangtan Electrochemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guocheng Mining and Xiangtan Electrochemical
The main advantage of trading using opposite Guocheng Mining and Xiangtan Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining position performs unexpectedly, Xiangtan Electrochemical 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 Xiangtan Electrochemical will offset losses from the drop in Xiangtan Electrochemical's long position.Guocheng Mining vs. Glodon Software Co | Guocheng Mining vs. Bingo Software Co | Guocheng Mining vs. Beijing Baolande Software | Guocheng Mining vs. Zhengzhou Coal Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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