Correlation Between Changchun and GreenTech Environmental
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By analyzing existing cross correlation between Changchun UP Optotech and GreenTech Environmental Co, you can compare the effects of market volatilities on Changchun and GreenTech Environmental 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 GreenTech Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and GreenTech Environmental.
Diversification Opportunities for Changchun and GreenTech Environmental
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and GreenTech is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and GreenTech Environmental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTech Environmental 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 GreenTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTech Environmental has no effect on the direction of Changchun i.e., Changchun and GreenTech Environmental go up and down completely randomly.
Pair Corralation between Changchun and GreenTech Environmental
Assuming the 90 days trading horizon Changchun UP Optotech is expected to under-perform the GreenTech Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Changchun UP Optotech is 1.15 times less risky than GreenTech Environmental. The stock trades about -0.01 of its potential returns per unit of risk. The GreenTech Environmental Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,372 in GreenTech Environmental Co on September 1, 2024 and sell it today you would earn a total of 224.00 from holding GreenTech Environmental Co or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. GreenTech Environmental Co
Performance |
| Timeline |
| Changchun UP Optotech |
| GreenTech Environmental |
Changchun and GreenTech Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and GreenTech Environmental
The main advantage of trading using opposite Changchun and GreenTech Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, GreenTech Environmental 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 GreenTech Environmental will offset losses from the drop in GreenTech Environmental's long position.| Changchun vs. Zhongshan Public Utilities | Changchun vs. Harvest Fund Management | Changchun vs. Offshore Oil Engineering | Changchun vs. Xinjiang Beixin RoadBridge |
| GreenTech Environmental vs. Lutian Machinery Co | GreenTech Environmental vs. China Longyuan Power | GreenTech Environmental vs. PetroChina Co Ltd | GreenTech Environmental vs. Bank of China |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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