Correlation Between Guangzhou KingTeller and Tianjin Ruixin
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By analyzing existing cross correlation between Guangzhou KingTeller Technology and Tianjin Ruixin Technology, you can compare the effects of market volatilities on Guangzhou KingTeller and Tianjin Ruixin 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 Tianjin Ruixin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KingTeller and Tianjin Ruixin.
Diversification Opportunities for Guangzhou KingTeller and Tianjin Ruixin
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Tianjin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KingTeller Technolog and Tianjin Ruixin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Ruixin Technology 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 Tianjin Ruixin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Ruixin Technology has no effect on the direction of Guangzhou KingTeller i.e., Guangzhou KingTeller and Tianjin Ruixin go up and down completely randomly.
Pair Corralation between Guangzhou KingTeller and Tianjin Ruixin
Assuming the 90 days trading horizon Guangzhou KingTeller Technology is expected to generate 1.43 times more return on investment than Tianjin Ruixin. However, Guangzhou KingTeller is 1.43 times more volatile than Tianjin Ruixin Technology. It trades about 0.13 of its potential returns per unit of risk. Tianjin Ruixin Technology is currently generating about 0.14 per unit of risk. If you would invest 441.00 in Guangzhou KingTeller Technology on November 8, 2024 and sell it today you would earn a total of 30.00 from holding Guangzhou KingTeller Technology or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Guangzhou KingTeller Technolog vs. Tianjin Ruixin Technology
Performance |
| Timeline |
| Guangzhou KingTeller |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tianjin Ruixin Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Guangzhou KingTeller and Tianjin Ruixin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KingTeller and Tianjin Ruixin
The main advantage of trading using opposite Guangzhou KingTeller and Tianjin Ruixin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KingTeller position performs unexpectedly, Tianjin Ruixin 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 Tianjin Ruixin will offset losses from the drop in Tianjin Ruixin's long position.The idea behind Guangzhou KingTeller Technology and Tianjin Ruixin Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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