Correlation Between Guangzhou KingTeller and Changchun
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By analyzing existing cross correlation between Guangzhou KingTeller Technology and Changchun UP Optotech, you can compare the effects of market volatilities on Guangzhou KingTeller and Changchun 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 Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KingTeller and Changchun.
Diversification Opportunities for Guangzhou KingTeller and Changchun
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guangzhou and Changchun is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KingTeller Technolog and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech 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 Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Guangzhou KingTeller i.e., Guangzhou KingTeller and Changchun go up and down completely randomly.
Pair Corralation between Guangzhou KingTeller and Changchun
Assuming the 90 days trading horizon Guangzhou KingTeller Technology is expected to generate 1.05 times more return on investment than Changchun. However, Guangzhou KingTeller is 1.05 times more volatile than Changchun UP Optotech. It trades about 0.04 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about 0.04 per unit of risk. If you would invest 314.00 in Guangzhou KingTeller Technology on November 7, 2024 and sell it today you would earn a total of 144.00 from holding Guangzhou KingTeller Technology or generate 45.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KingTeller Technolog vs. Changchun UP Optotech
Performance |
| Timeline |
| Guangzhou KingTeller |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Changchun UP Optotech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangzhou KingTeller and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KingTeller and Changchun
The main advantage of trading using opposite Guangzhou KingTeller and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KingTeller position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.The idea behind Guangzhou KingTeller Technology and Changchun UP Optotech 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.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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