Correlation Between China Securities and Guangzhou Hongli
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By analyzing existing cross correlation between China Securities 800 and Guangzhou Hongli Opto, you can compare the effects of market volatilities on China Securities and Guangzhou Hongli 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 Hongli. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Guangzhou Hongli.
Diversification Opportunities for China Securities and Guangzhou Hongli
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangzhou is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Guangzhou Hongli Opto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Hongli Opto 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 Hongli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Hongli Opto has no effect on the direction of China Securities i.e., China Securities and Guangzhou Hongli go up and down completely randomly.
Pair Corralation between China Securities and Guangzhou Hongli
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.39 times more return on investment than Guangzhou Hongli. However, China Securities 800 is 2.55 times less risky than Guangzhou Hongli. It trades about 0.03 of its potential returns per unit of risk. Guangzhou Hongli Opto is currently generating about 0.0 per unit of risk. If you would invest 366,939 in China Securities 800 on October 16, 2024 and sell it today you would earn a total of 32,230 from holding China Securities 800 or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Guangzhou Hongli Opto
Performance |
| Timeline |
China Securities and Guangzhou Hongli Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Guangzhou Hongli Opto
Pair trading matchups for Guangzhou Hongli
Pair Trading with China Securities and Guangzhou Hongli
The main advantage of trading using opposite China Securities and Guangzhou Hongli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Guangzhou Hongli 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 Hongli will offset losses from the drop in Guangzhou Hongli's long position.| China Securities vs. Zhongyin Babi Food | China Securities vs. Anji Foodstuff Co | China Securities vs. Anhui Huaheng Biotechnology | China Securities vs. Shandong Sanyuan Biotechnology |
| Guangzhou Hongli vs. Montage Technology Co | Guangzhou Hongli vs. HanS Laser Tech | Guangzhou Hongli vs. Sharetronic Data Technology | Guangzhou Hongli vs. CITIC Guoan Information |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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