Correlation Between Guangzhou KingTeller and Caihong Display
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By analyzing existing cross correlation between Guangzhou KingTeller Technology and Caihong Display Devices, you can compare the effects of market volatilities on Guangzhou KingTeller and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KingTeller and Caihong Display.
Diversification Opportunities for Guangzhou KingTeller and Caihong Display
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Guangzhou and Caihong is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KingTeller Technolog and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Guangzhou KingTeller i.e., Guangzhou KingTeller and Caihong Display go up and down completely randomly.
Pair Corralation between Guangzhou KingTeller and Caihong Display
Assuming the 90 days trading horizon Guangzhou KingTeller is expected to generate 2.08 times less return on investment than Caihong Display. In addition to that, Guangzhou KingTeller is 1.36 times more volatile than Caihong Display Devices. It trades about 0.03 of its total potential returns per unit of risk. Caihong Display Devices is currently generating about 0.1 per unit of volatility. If you would invest 806.00 in Caihong Display Devices on November 3, 2024 and sell it today you would earn a total of 42.00 from holding Caihong Display Devices or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KingTeller Technolog vs. Caihong Display Devices
Performance |
| Timeline |
| Guangzhou KingTeller |
| Caihong Display Devices |
Guangzhou KingTeller and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KingTeller and Caihong Display
The main advantage of trading using opposite Guangzhou KingTeller and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KingTeller position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display's long position.The idea behind Guangzhou KingTeller Technology and Caihong Display Devices 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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