Correlation Between China Securities and Guangdong Liantai
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By analyzing existing cross correlation between China Securities 800 and Guangdong Liantai Environmental, you can compare the effects of market volatilities on China Securities and Guangdong Liantai 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 Guangdong Liantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Guangdong Liantai.
Diversification Opportunities for China Securities and Guangdong Liantai
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Guangdong is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Guangdong Liantai Environmenta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Liantai 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 Guangdong Liantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Liantai has no effect on the direction of China Securities i.e., China Securities and Guangdong Liantai go up and down completely randomly.
Pair Corralation between China Securities and Guangdong Liantai
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.59 times more return on investment than Guangdong Liantai. However, China Securities 800 is 1.71 times less risky than Guangdong Liantai. It trades about 0.01 of its potential returns per unit of risk. Guangdong Liantai Environmental is currently generating about -0.02 per unit of risk. If you would invest 417,960 in China Securities 800 on August 31, 2024 and sell it today you would earn a total of 5,576 from holding China Securities 800 or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
China Securities 800 vs. Guangdong Liantai Environmenta
Performance |
| Timeline |
China Securities and Guangdong Liantai Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Guangdong Liantai Environmental
Pair trading matchups for Guangdong Liantai
Pair Trading with China Securities and Guangdong Liantai
The main advantage of trading using opposite China Securities and Guangdong Liantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Guangdong Liantai 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 Guangdong Liantai will offset losses from the drop in Guangdong Liantai's long position.| China Securities vs. Sinofibers Technology Co | China Securities vs. Anji Foodstuff Co | China Securities vs. Niutech Environment Technology | China Securities vs. Linewell Software Co |
| Guangdong Liantai vs. Cultural Investment Holdings | Guangdong Liantai vs. Gome Telecom Equipment | Guangdong Liantai vs. Bus Online Co | Guangdong Liantai vs. Holitech Technology Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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