Correlation Between Guangdong Advertising and Industrial
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By analyzing existing cross correlation between Guangdong Advertising Co and Industrial and Commercial, you can compare the effects of market volatilities on Guangdong Advertising and Industrial 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 Advertising with a short position of Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Advertising and Industrial.
Diversification Opportunities for Guangdong Advertising and Industrial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guangdong and Industrial is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Advertising Co and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial and Guangdong Advertising 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 Advertising Co are associated (or correlated) with Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Guangdong Advertising i.e., Guangdong Advertising and Industrial go up and down completely randomly.
Pair Corralation between Guangdong Advertising and Industrial
Assuming the 90 days trading horizon Guangdong Advertising Co is expected to generate 2.51 times more return on investment than Industrial. However, Guangdong Advertising is 2.51 times more volatile than Industrial and Commercial. It trades about 0.06 of its potential returns per unit of risk. Industrial and Commercial is currently generating about 0.09 per unit of risk. If you would invest 552.00 in Guangdong Advertising Co on August 25, 2024 and sell it today you would earn a total of 220.00 from holding Guangdong Advertising Co or generate 39.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Advertising Co vs. Industrial and Commercial
Performance |
| Timeline |
| Guangdong Advertising |
| Industrial and Commercial |
Guangdong Advertising and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Advertising and Industrial
The main advantage of trading using opposite Guangdong Advertising and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Advertising position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.| Guangdong Advertising vs. Industrial and Commercial | Guangdong Advertising vs. Agricultural Bank of | Guangdong Advertising vs. China Construction Bank | Guangdong Advertising vs. Bank of China |
| Industrial vs. Anhui Huilong Agricultural | Industrial vs. Agricultural Bank of | Industrial vs. Masterwork Machinery | Industrial vs. Huitong Construction Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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