Correlation Between Guangdong Shenglu and Changzhou Evergreen
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Changzhou Evergreen Technology, you can compare the effects of market volatilities on Guangdong Shenglu and Changzhou Evergreen 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 Shenglu with a short position of Changzhou Evergreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Changzhou Evergreen.
Diversification Opportunities for Guangdong Shenglu and Changzhou Evergreen
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Changzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Changzhou Evergreen Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changzhou Evergreen and Guangdong Shenglu 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 Shenglu Telecommunication are associated (or correlated) with Changzhou Evergreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changzhou Evergreen has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Changzhou Evergreen go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Changzhou Evergreen
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to generate 1.03 times more return on investment than Changzhou Evergreen. However, Guangdong Shenglu is 1.03 times more volatile than Changzhou Evergreen Technology. It trades about -0.02 of its potential returns per unit of risk. Changzhou Evergreen Technology is currently generating about -0.04 per unit of risk. If you would invest 1,004 in Guangdong Shenglu Telecommunication on August 29, 2024 and sell it today you would lose (273.00) from holding Guangdong Shenglu Telecommunication or give up 27.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Changzhou Evergreen Technology
Performance |
| Timeline |
| Guangdong Shenglu |
| Changzhou Evergreen |
Guangdong Shenglu and Changzhou Evergreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Changzhou Evergreen
The main advantage of trading using opposite Guangdong Shenglu and Changzhou Evergreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Changzhou Evergreen 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 Changzhou Evergreen will offset losses from the drop in Changzhou Evergreen's long position.| Guangdong Shenglu vs. China State Construction | Guangdong Shenglu vs. Huafa Industrial Co | Guangdong Shenglu vs. China International Capital | Guangdong Shenglu vs. Kweichow Moutai Co |
| Changzhou Evergreen vs. Changchun Faway Automobile | Changzhou Evergreen vs. Eastern Communications Co | Changzhou Evergreen vs. Lander Sports Development | Changzhou Evergreen vs. Sunwave Communications Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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