Correlation Between Guangdong Jingyi and Chengdu Kanghua
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Guangdong Jingyi and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Chengdu Kanghua.
Diversification Opportunities for Guangdong Jingyi and Chengdu Kanghua
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Chengdu is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Chengdu Kanghua
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 0.67 times more return on investment than Chengdu Kanghua. However, Guangdong Jingyi Metal is 1.5 times less risky than Chengdu Kanghua. It trades about 0.28 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.26 per unit of risk. If you would invest 707.00 in Guangdong Jingyi Metal on September 13, 2024 and sell it today you would earn a total of 66.00 from holding Guangdong Jingyi Metal or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Chengdu Kanghua Biol |
Guangdong Jingyi and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Chengdu Kanghua
The main advantage of trading using opposite Guangdong Jingyi and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Shandong Gold Mining | Guangdong Jingyi vs. Inner Mongolia BaoTou | Guangdong Jingyi vs. Jiangxi Ganfeng Lithium |
| Chengdu Kanghua vs. Bank of Suzhou | Chengdu Kanghua vs. Peoples Insurance of | Chengdu Kanghua vs. Yonyou Auto Information | Chengdu Kanghua vs. Longmaster Information Tech |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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