Correlation Between Qingdao Foods and Guangzhou Restaurants
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By analyzing existing cross correlation between Qingdao Foods Co and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Qingdao Foods and Guangzhou Restaurants 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 Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Guangzhou Restaurants.
Diversification Opportunities for Qingdao Foods and Guangzhou Restaurants
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qingdao and Guangzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Qingdao Foods and Guangzhou Restaurants
Assuming the 90 days trading horizon Qingdao Foods Co is expected to generate 1.96 times more return on investment than Guangzhou Restaurants. However, Qingdao Foods is 1.96 times more volatile than Guangzhou Restaurants Group. It trades about 0.22 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about 0.02 per unit of risk. If you would invest 1,244 in Qingdao Foods Co on August 31, 2024 and sell it today you would earn a total of 211.00 from holding Qingdao Foods Co or generate 16.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Guangzhou Restaurants Group
Performance |
| Timeline |
| Qingdao Foods |
| Guangzhou Restaurants |
Qingdao Foods and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Guangzhou Restaurants
The main advantage of trading using opposite Qingdao Foods and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Guangzhou Restaurants 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 Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.| Qingdao Foods vs. Lutian Machinery Co | Qingdao Foods vs. PetroChina Co Ltd | Qingdao Foods vs. Bank of China | Qingdao Foods vs. Gansu Jiu Steel |
| Guangzhou Restaurants vs. Chinese Universe Publishing | Guangzhou Restaurants vs. Qingdao Foods Co | Guangzhou Restaurants vs. HaiXin Foods Co | Guangzhou Restaurants vs. Xiamen Jihong Package |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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