Correlation Between Changchun and Kunshan Guoli
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By analyzing existing cross correlation between Changchun UP Optotech and Kunshan Guoli Electronic, you can compare the effects of market volatilities on Changchun and Kunshan Guoli 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 Changchun with a short position of Kunshan Guoli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Kunshan Guoli.
Diversification Opportunities for Changchun and Kunshan Guoli
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Kunshan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Kunshan Guoli Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunshan Guoli Electronic and Changchun 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 Changchun UP Optotech are associated (or correlated) with Kunshan Guoli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunshan Guoli Electronic has no effect on the direction of Changchun i.e., Changchun and Kunshan Guoli go up and down completely randomly.
Pair Corralation between Changchun and Kunshan Guoli
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.15 times more return on investment than Kunshan Guoli. However, Changchun is 1.15 times more volatile than Kunshan Guoli Electronic. It trades about 0.01 of its potential returns per unit of risk. Kunshan Guoli Electronic is currently generating about -0.02 per unit of risk. If you would invest 4,384 in Changchun UP Optotech on September 4, 2024 and sell it today you would lose (65.00) from holding Changchun UP Optotech or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Kunshan Guoli Electronic
Performance |
| Timeline |
| Changchun UP Optotech |
| Kunshan Guoli Electronic |
Changchun and Kunshan Guoli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Kunshan Guoli
The main advantage of trading using opposite Changchun and Kunshan Guoli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Kunshan Guoli 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 Kunshan Guoli will offset losses from the drop in Kunshan Guoli's long position.| Changchun vs. Kweichow Moutai Co | Changchun vs. NAURA Technology Group | Changchun vs. APT Medical | Changchun vs. BYD Co Ltd |
| Kunshan Guoli vs. Changchun UP Optotech | Kunshan Guoli vs. Lingyuan Iron Steel | Kunshan Guoli vs. GreenTech Environmental Co | Kunshan Guoli vs. Sinosteel Engineering and |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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