Correlation Between Qingdao Foods and Gansu Yasheng
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By analyzing existing cross correlation between Qingdao Foods Co and Gansu Yasheng Industrial, you can compare the effects of market volatilities on Qingdao Foods and Gansu Yasheng 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 Qingdao Foods with a short position of Gansu Yasheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Gansu Yasheng.
Diversification Opportunities for Qingdao Foods and Gansu Yasheng
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qingdao and Gansu is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Gansu Yasheng Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Yasheng Industrial and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with Gansu Yasheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Yasheng Industrial has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Gansu Yasheng go up and down completely randomly.
Pair Corralation between Qingdao Foods and Gansu Yasheng
Assuming the 90 days trading horizon Qingdao Foods Co is expected to generate 0.93 times more return on investment than Gansu Yasheng. However, Qingdao Foods Co is 1.08 times less risky than Gansu Yasheng. It trades about -0.03 of its potential returns per unit of risk. Gansu Yasheng Industrial is currently generating about -0.12 per unit of risk. If you would invest 1,377 in Qingdao Foods Co on October 23, 2024 and sell it today you would lose (22.00) from holding Qingdao Foods Co or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Gansu Yasheng Industrial
Performance |
| Timeline |
| Qingdao Foods |
| Gansu Yasheng Industrial |
Qingdao Foods and Gansu Yasheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Gansu Yasheng
The main advantage of trading using opposite Qingdao Foods and Gansu Yasheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Gansu Yasheng 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 Gansu Yasheng will offset losses from the drop in Gansu Yasheng's long position.| Qingdao Foods vs. Chongqing Brewery Co | Qingdao Foods vs. Hunan Tyen Machinery | Qingdao Foods vs. Huasi Agricultural Development | Qingdao Foods vs. Ningbo Construction Co |
| Gansu Yasheng vs. Shuhua Sports Co | Gansu Yasheng vs. Sportsoul Co Ltd | Gansu Yasheng vs. Liaoning Chengda Biotechnology | Gansu Yasheng vs. Fujian Wanchen Biotechnology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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