Correlation Between Guangdong Jingyi and Shenzhen Bioeasy
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Shenzhen Bioeasy Biotechnology, you can compare the effects of market volatilities on Guangdong Jingyi and Shenzhen Bioeasy 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 Bioeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Shenzhen Bioeasy.
Diversification Opportunities for Guangdong Jingyi and Shenzhen Bioeasy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Shenzhen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Shenzhen Bioeasy Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bioeasy Bio 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 Bioeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bioeasy Bio has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Shenzhen Bioeasy go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Shenzhen Bioeasy
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 0.9 times more return on investment than Shenzhen Bioeasy. However, Guangdong Jingyi Metal is 1.11 times less risky than Shenzhen Bioeasy. It trades about 0.0 of its potential returns per unit of risk. Shenzhen Bioeasy Biotechnology is currently generating about -0.14 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 Bioeasy Biotechnology
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Shenzhen Bioeasy Bio |
Guangdong Jingyi and Shenzhen Bioeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Shenzhen Bioeasy
The main advantage of trading using opposite Guangdong Jingyi and Shenzhen Bioeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Shenzhen Bioeasy 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 Bioeasy will offset losses from the drop in Shenzhen Bioeasy's long position.The idea behind Guangdong Jingyi Metal and Shenzhen Bioeasy Biotechnology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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