Correlation Between China Longyuan and Guangzhou Shangpin
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By analyzing existing cross correlation between China Longyuan Power and Guangzhou Shangpin Home, you can compare the effects of market volatilities on China Longyuan and Guangzhou Shangpin 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 Longyuan with a short position of Guangzhou Shangpin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Guangzhou Shangpin.
Diversification Opportunities for China Longyuan and Guangzhou Shangpin
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangzhou is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Guangzhou Shangpin Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Shangpin Home and China Longyuan 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 Longyuan Power are associated (or correlated) with Guangzhou Shangpin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Shangpin Home has no effect on the direction of China Longyuan i.e., China Longyuan and Guangzhou Shangpin go up and down completely randomly.
Pair Corralation between China Longyuan and Guangzhou Shangpin
Assuming the 90 days trading horizon China Longyuan Power is expected to under-perform the Guangzhou Shangpin. But the stock apears to be less risky and, when comparing its historical volatility, China Longyuan Power is 1.84 times less risky than Guangzhou Shangpin. The stock trades about -0.22 of its potential returns per unit of risk. The Guangzhou Shangpin Home is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,424 in Guangzhou Shangpin Home on September 13, 2024 and sell it today you would earn a total of 86.00 from holding Guangzhou Shangpin Home or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. Guangzhou Shangpin Home
Performance |
| Timeline |
| China Longyuan Power |
| Guangzhou Shangpin Home |
China Longyuan and Guangzhou Shangpin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Guangzhou Shangpin
The main advantage of trading using opposite China Longyuan and Guangzhou Shangpin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Guangzhou Shangpin 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 Shangpin will offset losses from the drop in Guangzhou Shangpin's long position.| China Longyuan vs. Xinhua Winshare Publishing | China Longyuan vs. Will Semiconductor Co | China Longyuan vs. Jiangsu Phoenix Publishing | China Longyuan vs. Southchip Semiconductor Technology |
| Guangzhou Shangpin vs. Lutian Machinery Co | Guangzhou Shangpin vs. China Longyuan Power | Guangzhou Shangpin vs. PetroChina Co Ltd | Guangzhou Shangpin vs. Bank of China |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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