Correlation Between Guangdong Jingyi and Hangzhou Huawang
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Hangzhou Huawang New, you can compare the effects of market volatilities on Guangdong Jingyi and Hangzhou Huawang 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 Hangzhou Huawang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Hangzhou Huawang.
Diversification Opportunities for Guangdong Jingyi and Hangzhou Huawang
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Hangzhou is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Hangzhou Huawang New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Huawang New 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 Hangzhou Huawang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Huawang New has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Hangzhou Huawang go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Hangzhou Huawang
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 1.48 times more return on investment than Hangzhou Huawang. However, Guangdong Jingyi is 1.48 times more volatile than Hangzhou Huawang New. It trades about 0.2 of its potential returns per unit of risk. Hangzhou Huawang New is currently generating about 0.1 per unit of risk. If you would invest 660.00 in Guangdong Jingyi Metal on September 1, 2024 and sell it today you would earn a total of 76.00 from holding Guangdong Jingyi Metal or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Hangzhou Huawang New
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Hangzhou Huawang New |
Guangdong Jingyi and Hangzhou Huawang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Hangzhou Huawang
The main advantage of trading using opposite Guangdong Jingyi and Hangzhou Huawang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Hangzhou Huawang 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 Hangzhou Huawang will offset losses from the drop in Hangzhou Huawang's long position.| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Shandong Gold Mining |
| Hangzhou Huawang vs. Zijin Mining Group | Hangzhou Huawang vs. Wanhua Chemical Group | Hangzhou Huawang vs. Baoshan Iron Steel | Hangzhou Huawang vs. Shandong Gold Mining |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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