Correlation Between Guangdong Jingyi and HUAQIN TECHNOLOGY
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By analyzing existing cross correlation between Guangdong Jingyi Metal and HUAQIN TECHNOLOGY LTD, you can compare the effects of market volatilities on Guangdong Jingyi and HUAQIN 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 HUAQIN TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and HUAQIN TECHNOLOGY.
Diversification Opportunities for Guangdong Jingyi and HUAQIN TECHNOLOGY
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and HUAQIN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and HUAQIN TECHNOLOGY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUAQIN TECHNOLOGY LTD 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 HUAQIN TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUAQIN TECHNOLOGY LTD has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and HUAQIN TECHNOLOGY go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and HUAQIN TECHNOLOGY
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 0.94 times more return on investment than HUAQIN TECHNOLOGY. However, Guangdong Jingyi Metal is 1.07 times less risky than HUAQIN TECHNOLOGY. It trades about 0.11 of its potential returns per unit of risk. HUAQIN TECHNOLOGY LTD is currently generating about 0.04 per unit of risk. If you would invest 549.00 in Guangdong Jingyi Metal on September 3, 2024 and sell it today you would earn a total of 187.00 from holding Guangdong Jingyi Metal or generate 34.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. HUAQIN TECHNOLOGY LTD
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| HUAQIN TECHNOLOGY LTD |
Guangdong Jingyi and HUAQIN TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and HUAQIN TECHNOLOGY
The main advantage of trading using opposite Guangdong Jingyi and HUAQIN TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, HUAQIN 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 HUAQIN TECHNOLOGY will offset losses from the drop in HUAQIN TECHNOLOGY's long position.| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Hoshine Silicon Ind |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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