Correlation Between Guangzhou KingTeller and Jilin Chemical
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By analyzing existing cross correlation between Guangzhou KingTeller Technology and Jilin Chemical Fibre, you can compare the effects of market volatilities on Guangzhou KingTeller and Jilin Chemical 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 KingTeller with a short position of Jilin Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KingTeller and Jilin Chemical.
Diversification Opportunities for Guangzhou KingTeller and Jilin Chemical
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Jilin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KingTeller Technolog and Jilin Chemical Fibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Chemical Fibre and Guangzhou KingTeller 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 KingTeller Technology are associated (or correlated) with Jilin Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Chemical Fibre has no effect on the direction of Guangzhou KingTeller i.e., Guangzhou KingTeller and Jilin Chemical go up and down completely randomly.
Pair Corralation between Guangzhou KingTeller and Jilin Chemical
Assuming the 90 days trading horizon Guangzhou KingTeller Technology is expected to generate 1.27 times more return on investment than Jilin Chemical. However, Guangzhou KingTeller is 1.27 times more volatile than Jilin Chemical Fibre. It trades about 0.04 of its potential returns per unit of risk. Jilin Chemical Fibre is currently generating about 0.03 per unit of risk. If you would invest 385.00 in Guangzhou KingTeller Technology on September 4, 2024 and sell it today you would earn a total of 128.00 from holding Guangzhou KingTeller Technology or generate 33.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KingTeller Technolog vs. Jilin Chemical Fibre
Performance |
| Timeline |
| Guangzhou KingTeller |
| Jilin Chemical Fibre |
Guangzhou KingTeller and Jilin Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KingTeller and Jilin Chemical
The main advantage of trading using opposite Guangzhou KingTeller and Jilin Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KingTeller position performs unexpectedly, Jilin Chemical 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 Jilin Chemical will offset losses from the drop in Jilin Chemical's long position.The idea behind Guangzhou KingTeller Technology and Jilin Chemical Fibre 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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