Correlation Between China Securities and Guangzhou KDT
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By analyzing existing cross correlation between China Securities 800 and Guangzhou KDT Machinery, you can compare the effects of market volatilities on China Securities 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 China Securities with a short position of Guangzhou KDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Guangzhou KDT.
Diversification Opportunities for China Securities and Guangzhou KDT
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Guangzhou is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 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 China Securities 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 China Securities 800 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 China Securities i.e., China Securities and Guangzhou KDT go up and down completely randomly.
Pair Corralation between China Securities and Guangzhou KDT
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.71 times more return on investment than Guangzhou KDT. However, China Securities 800 is 1.42 times less risky than Guangzhou KDT. It trades about -0.29 of its potential returns per unit of risk. Guangzhou KDT Machinery is currently generating about -0.47 per unit of risk. If you would invest 432,984 in China Securities 800 on October 12, 2024 and sell it today you would lose (27,815) from holding China Securities 800 or give up 6.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Guangzhou KDT Machinery
Performance |
| Timeline |
China Securities and Guangzhou KDT Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Guangzhou KDT Machinery
Pair trading matchups for Guangzhou KDT
Pair Trading with China Securities and Guangzhou KDT
The main advantage of trading using opposite China Securities and Guangzhou KDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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.| China Securities vs. Huatian Hotel Group | China Securities vs. Keeson Technology Corp | China Securities vs. Jiujiang Shanshui Technology | China Securities vs. Smartgiant Technology Co |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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