Correlation Between Guangdong Jingyi and BOE Technology
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By analyzing existing cross correlation between Guangdong Jingyi Metal and BOE Technology Group, you can compare the effects of market volatilities on Guangdong Jingyi and BOE Technology 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 BOE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and BOE Technology.
Diversification Opportunities for Guangdong Jingyi and BOE Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guangdong and BOE is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and BOE Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOE Technology Group 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 BOE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOE Technology Group has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and BOE Technology go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and BOE Technology
Assuming the 90 days trading horizon Guangdong Jingyi is expected to generate 1.57 times less return on investment than BOE Technology. In addition to that, Guangdong Jingyi is 1.65 times more volatile than BOE Technology Group. It trades about 0.01 of its total potential returns per unit of risk. BOE Technology Group is currently generating about 0.02 per unit of volatility. If you would invest 390.00 in BOE Technology Group on October 30, 2024 and sell it today you would earn a total of 56.00 from holding BOE Technology Group or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. BOE Technology Group
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| BOE Technology Group |
Guangdong Jingyi and BOE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and BOE Technology
The main advantage of trading using opposite Guangdong Jingyi and BOE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, BOE Technology 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 BOE Technology will offset losses from the drop in BOE Technology's long position.The idea behind Guangdong Jingyi Metal and BOE Technology Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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