Correlation Between Guangdong Jingyi and Shenzhen SDG
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Shenzhen SDG Information, you can compare the effects of market volatilities on Guangdong Jingyi and Shenzhen SDG 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 Guangdong Jingyi with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Shenzhen SDG.
Diversification Opportunities for Guangdong Jingyi and Shenzhen SDG
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Shenzhen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Shenzhen SDG Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Information and Guangdong Jingyi 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 Guangdong Jingyi Metal are associated (or correlated) with Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Information has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Shenzhen SDG go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Shenzhen SDG
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 1.25 times more return on investment than Shenzhen SDG. However, Guangdong Jingyi is 1.25 times more volatile than Shenzhen SDG Information. It trades about 0.0 of its potential returns per unit of risk. Shenzhen SDG Information is currently generating about -0.04 per unit of risk. If you would invest 736.00 in Guangdong Jingyi Metal on October 30, 2024 and sell it today you would lose (7.00) from holding Guangdong Jingyi Metal or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Shenzhen SDG Information
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Shenzhen SDG Information |
Guangdong Jingyi and Shenzhen SDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Shenzhen SDG
The main advantage of trading using opposite Guangdong Jingyi and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Shenzhen SDG 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 Shenzhen SDG will offset losses from the drop in Shenzhen SDG's long position.The idea behind Guangdong Jingyi Metal and Shenzhen SDG Information 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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