Correlation Between Guocheng Mining and SUNSEA Telecommunicatio
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By analyzing existing cross correlation between Guocheng Mining Co and SUNSEA Telecommunications Co, you can compare the effects of market volatilities on Guocheng Mining and SUNSEA Telecommunicatio 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 SUNSEA Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and SUNSEA Telecommunicatio.
Diversification Opportunities for Guocheng Mining and SUNSEA Telecommunicatio
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guocheng and SUNSEA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining Co and SUNSEA Telecommunications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNSEA Telecommunicatio 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 SUNSEA Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNSEA Telecommunicatio has no effect on the direction of Guocheng Mining i.e., Guocheng Mining and SUNSEA Telecommunicatio go up and down completely randomly.
Pair Corralation between Guocheng Mining and SUNSEA Telecommunicatio
Assuming the 90 days trading horizon Guocheng Mining is expected to generate 1.68 times less return on investment than SUNSEA Telecommunicatio. But when comparing it to its historical volatility, Guocheng Mining Co is 2.19 times less risky than SUNSEA Telecommunicatio. It trades about 0.11 of its potential returns per unit of risk. SUNSEA Telecommunications Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 791.00 in SUNSEA Telecommunications Co on November 7, 2024 and sell it today you would earn a total of 44.00 from holding SUNSEA Telecommunications Co or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guocheng Mining Co vs. SUNSEA Telecommunications Co
Performance |
| Timeline |
| Guocheng Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SUNSEA Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guocheng Mining and SUNSEA Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guocheng Mining and SUNSEA Telecommunicatio
The main advantage of trading using opposite Guocheng Mining and SUNSEA Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining position performs unexpectedly, SUNSEA Telecommunicatio 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 SUNSEA Telecommunicatio will offset losses from the drop in SUNSEA Telecommunicatio's long position.The idea behind Guocheng Mining Co and SUNSEA Telecommunications Co 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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