Correlation Between Guangzhou Seagull and Kuangda Technology
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By analyzing existing cross correlation between Guangzhou Seagull Kitchen and Kuangda Technology Group, you can compare the effects of market volatilities on Guangzhou Seagull and Kuangda Technology 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 Guangzhou Seagull with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Seagull and Kuangda Technology.
Diversification Opportunities for Guangzhou Seagull and Kuangda Technology
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Kuangda is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Seagull Kitchen and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Guangzhou Seagull 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 Guangzhou Seagull Kitchen are associated (or correlated) with Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Guangzhou Seagull i.e., Guangzhou Seagull and Kuangda Technology go up and down completely randomly.
Pair Corralation between Guangzhou Seagull and Kuangda Technology
Assuming the 90 days trading horizon Guangzhou Seagull Kitchen is expected to under-perform the Kuangda Technology. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Seagull Kitchen is 1.04 times less risky than Kuangda Technology. The stock trades about -0.12 of its potential returns per unit of risk. The Kuangda Technology Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 516.00 in Kuangda Technology Group on September 27, 2024 and sell it today you would earn a total of 5.00 from holding Kuangda Technology Group or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Seagull Kitchen vs. Kuangda Technology Group
Performance |
| Timeline |
| Guangzhou Seagull Kitchen |
| Kuangda Technology |
Guangzhou Seagull and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Seagull and Kuangda Technology
The main advantage of trading using opposite Guangzhou Seagull and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Seagull position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.The idea behind Guangzhou Seagull Kitchen and Kuangda Technology Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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