Correlation Between Guangzhou KingTeller and Weihai Honglin
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By analyzing existing cross correlation between Guangzhou KingTeller Technology and Weihai Honglin Electronic, you can compare the effects of market volatilities on Guangzhou KingTeller and Weihai Honglin 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 Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KingTeller and Weihai Honglin.
Diversification Opportunities for Guangzhou KingTeller and Weihai Honglin
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangzhou and Weihai is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KingTeller Technolog and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic 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 Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Guangzhou KingTeller i.e., Guangzhou KingTeller and Weihai Honglin go up and down completely randomly.
Pair Corralation between Guangzhou KingTeller and Weihai Honglin
Assuming the 90 days trading horizon Guangzhou KingTeller Technology is expected to under-perform the Weihai Honglin. In addition to that, Guangzhou KingTeller is 1.43 times more volatile than Weihai Honglin Electronic. It trades about -0.36 of its total potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.09 per unit of volatility. If you would invest 1,409 in Weihai Honglin Electronic on October 12, 2024 and sell it today you would earn a total of 75.00 from holding Weihai Honglin Electronic or generate 5.32% 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. Weihai Honglin Electronic
Performance |
| Timeline |
| Guangzhou KingTeller |
| Weihai Honglin Electronic |
Guangzhou KingTeller and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KingTeller and Weihai Honglin
The main advantage of trading using opposite Guangzhou KingTeller and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KingTeller position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Guangzhou KingTeller vs. Chengdu Kanghua Biological | Guangzhou KingTeller vs. Beijing Wantai Biological | Guangzhou KingTeller vs. Suzhou Novoprotein Scientific | Guangzhou KingTeller vs. Aluminum Corp of |
| Weihai Honglin vs. Guangdong Xiongsu Technology | Weihai Honglin vs. Anhui Huaren Health | Weihai Honglin vs. Guangzhou KingTeller Technology | Weihai Honglin vs. Sinofibers Technology Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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