Correlation Between Gansu Huangtai and Dazhong Transportation
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By analyzing existing cross correlation between Gansu Huangtai Wine marketing and Dazhong Transportation Group, you can compare the effects of market volatilities on Gansu Huangtai and Dazhong Transportation 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 Gansu Huangtai with a short position of Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Huangtai and Dazhong Transportation.
Diversification Opportunities for Gansu Huangtai and Dazhong Transportation
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Dazhong is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Huangtai Wine marketing and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation and Gansu Huangtai 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 Gansu Huangtai Wine marketing are associated (or correlated) with Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Gansu Huangtai i.e., Gansu Huangtai and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Gansu Huangtai and Dazhong Transportation
Assuming the 90 days trading horizon Gansu Huangtai is expected to generate 1.9 times less return on investment than Dazhong Transportation. In addition to that, Gansu Huangtai is 1.16 times more volatile than Dazhong Transportation Group. It trades about 0.01 of its total potential returns per unit of risk. Dazhong Transportation Group is currently generating about 0.02 per unit of volatility. If you would invest 24.00 in Dazhong Transportation Group on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Dazhong Transportation Group or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Huangtai Wine marketing vs. Dazhong Transportation Group
Performance |
| Timeline |
| Gansu Huangtai Wine |
| Dazhong Transportation |
Gansu Huangtai and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Huangtai and Dazhong Transportation
The main advantage of trading using opposite Gansu Huangtai and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Huangtai position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.| Gansu Huangtai vs. China Petroleum Chemical | Gansu Huangtai vs. PetroChina Co Ltd | Gansu Huangtai vs. China State Construction | Gansu Huangtai vs. China Railway Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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