Correlation Between Sunwave Communications and Guangdong Jingyi
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By analyzing existing cross correlation between Sunwave Communications Co and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Sunwave Communications and Guangdong Jingyi 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 Sunwave Communications with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunwave Communications and Guangdong Jingyi.
Diversification Opportunities for Sunwave Communications and Guangdong Jingyi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sunwave and Guangdong is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sunwave Communications Co and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal and Sunwave Communications 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 Sunwave Communications Co are associated (or correlated) with Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Sunwave Communications i.e., Sunwave Communications and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Sunwave Communications and Guangdong Jingyi
Assuming the 90 days trading horizon Sunwave Communications is expected to generate 1.58 times less return on investment than Guangdong Jingyi. In addition to that, Sunwave Communications is 1.43 times more volatile than Guangdong Jingyi Metal. It trades about 0.12 of its total potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.27 per unit of volatility. If you would invest 595.00 in Guangdong Jingyi Metal on August 25, 2024 and sell it today you would earn a total of 103.00 from holding Guangdong Jingyi Metal or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunwave Communications Co vs. Guangdong Jingyi Metal
Performance |
| Timeline |
| Sunwave Communications |
| Guangdong Jingyi Metal |
Sunwave Communications and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunwave Communications and Guangdong Jingyi
The main advantage of trading using opposite Sunwave Communications and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunwave Communications position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi's long position.The idea behind Sunwave Communications Co and Guangdong Jingyi Metal 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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