Correlation Between SUNSEA Telecommunicatio and Guangdong Shenglu
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By analyzing existing cross correlation between SUNSEA Telecommunications Co and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on SUNSEA Telecommunicatio and Guangdong Shenglu 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 SUNSEA Telecommunicatio with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNSEA Telecommunicatio and Guangdong Shenglu.
Diversification Opportunities for SUNSEA Telecommunicatio and Guangdong Shenglu
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SUNSEA and Guangdong is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SUNSEA Telecommunications Co and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and SUNSEA Telecommunicatio 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 SUNSEA Telecommunications Co are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of SUNSEA Telecommunicatio i.e., SUNSEA Telecommunicatio and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between SUNSEA Telecommunicatio and Guangdong Shenglu
Assuming the 90 days trading horizon SUNSEA Telecommunications Co is expected to under-perform the Guangdong Shenglu. In addition to that, SUNSEA Telecommunicatio is 2.15 times more volatile than Guangdong Shenglu Telecommunication. It trades about -0.12 of its total potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.2 per unit of volatility. If you would invest 740.00 in Guangdong Shenglu Telecommunication on October 17, 2024 and sell it today you would lose (97.00) from holding Guangdong Shenglu Telecommunication or give up 13.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUNSEA Telecommunications Co vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| SUNSEA Telecommunicatio |
| Guangdong Shenglu |
SUNSEA Telecommunicatio and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUNSEA Telecommunicatio and Guangdong Shenglu
The main advantage of trading using opposite SUNSEA Telecommunicatio and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNSEA Telecommunicatio position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.The idea behind SUNSEA Telecommunications Co and Guangdong Shenglu Telecommunication 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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