Correlation Between Shenzhen Noposion and Guangzhou Ruoyuchen
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By analyzing existing cross correlation between Shenzhen Noposion Agrochemicals and Guangzhou Ruoyuchen Information, you can compare the effects of market volatilities on Shenzhen Noposion and Guangzhou Ruoyuchen 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 Shenzhen Noposion with a short position of Guangzhou Ruoyuchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Noposion and Guangzhou Ruoyuchen.
Diversification Opportunities for Shenzhen Noposion and Guangzhou Ruoyuchen
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Guangzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Noposion Agrochemical and Guangzhou Ruoyuchen Informatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Ruoyuchen and Shenzhen Noposion 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 Shenzhen Noposion Agrochemicals are associated (or correlated) with Guangzhou Ruoyuchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Ruoyuchen has no effect on the direction of Shenzhen Noposion i.e., Shenzhen Noposion and Guangzhou Ruoyuchen go up and down completely randomly.
Pair Corralation between Shenzhen Noposion and Guangzhou Ruoyuchen
Assuming the 90 days trading horizon Shenzhen Noposion is expected to generate 1.31 times less return on investment than Guangzhou Ruoyuchen. But when comparing it to its historical volatility, Shenzhen Noposion Agrochemicals is 1.57 times less risky than Guangzhou Ruoyuchen. It trades about 0.35 of its potential returns per unit of risk. Guangzhou Ruoyuchen Information is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,861 in Guangzhou Ruoyuchen Information on September 14, 2024 and sell it today you would earn a total of 530.00 from holding Guangzhou Ruoyuchen Information or generate 28.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Noposion Agrochemical vs. Guangzhou Ruoyuchen Informatio
Performance |
| Timeline |
| Shenzhen Noposion |
| Guangzhou Ruoyuchen |
Shenzhen Noposion and Guangzhou Ruoyuchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Noposion and Guangzhou Ruoyuchen
The main advantage of trading using opposite Shenzhen Noposion and Guangzhou Ruoyuchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Noposion position performs unexpectedly, Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen will offset losses from the drop in Guangzhou Ruoyuchen's long position.| Shenzhen Noposion vs. Gem Year Industrial Co | Shenzhen Noposion vs. Xinjiang Baodi Mining | Shenzhen Noposion vs. Gansu Yasheng Industrial | Shenzhen Noposion vs. Yunnan Xiyi Industrial |
| Guangzhou Ruoyuchen vs. Guilin Seamild Foods | Guangzhou Ruoyuchen vs. V V Food | Guangzhou Ruoyuchen vs. New Hope Dairy | Guangzhou Ruoyuchen vs. Shenzhen Noposion Agrochemicals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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