Correlation Between Guocheng Mining and Kuangda Technology
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By analyzing existing cross correlation between Guocheng Mining Co and Kuangda Technology Group, you can compare the effects of market volatilities on Guocheng Mining and Kuangda Technology 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 Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and Kuangda Technology.
Diversification Opportunities for Guocheng Mining and Kuangda Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guocheng and Kuangda is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining Co and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology 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 Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Guocheng Mining i.e., Guocheng Mining and Kuangda Technology go up and down completely randomly.
Pair Corralation between Guocheng Mining and Kuangda Technology
Assuming the 90 days trading horizon Guocheng Mining Co is expected to generate 1.34 times more return on investment than Kuangda Technology. However, Guocheng Mining is 1.34 times more volatile than Kuangda Technology Group. It trades about 0.11 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.12 per unit of risk. If you would invest 1,139 in Guocheng Mining Co on November 5, 2024 and sell it today you would earn a total of 49.00 from holding Guocheng Mining Co or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guocheng Mining Co vs. Kuangda Technology Group
Performance |
| Timeline |
| Guocheng Mining |
| Kuangda Technology |
Guocheng Mining and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guocheng Mining and Kuangda Technology
The main advantage of trading using opposite Guocheng Mining and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Guocheng Mining vs. Beingmate Baby Child | Guocheng Mining vs. Xinjiang Baodi Mining | Guocheng Mining vs. Guangzhou Haige Communications | Guocheng Mining vs. JCHX Mining Management |
| Kuangda Technology vs. PetroChina Co Ltd | Kuangda Technology vs. China Mobile Limited | Kuangda Technology vs. CNOOC Limited | Kuangda Technology vs. Ping An Insurance |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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