Correlation Between Guangdong Shenglu and Fujian Rongji
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Fujian Rongji Software, you can compare the effects of market volatilities on Guangdong Shenglu and Fujian Rongji 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 Fujian Rongji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Fujian Rongji.
Diversification Opportunities for Guangdong Shenglu and Fujian Rongji
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Fujian is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Fujian Rongji Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Rongji Software 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 Fujian Rongji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Rongji Software has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Fujian Rongji go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Fujian Rongji
Assuming the 90 days trading horizon Guangdong Shenglu is expected to generate 7.13 times less return on investment than Fujian Rongji. But when comparing it to its historical volatility, Guangdong Shenglu Telecommunication is 1.13 times less risky than Fujian Rongji. It trades about 0.0 of its potential returns per unit of risk. Fujian Rongji Software is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 826.00 in Fujian Rongji Software on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Fujian Rongji Software or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Fujian Rongji Software
Performance |
| Timeline |
| Guangdong Shenglu |
| Fujian Rongji Software |
Guangdong Shenglu and Fujian Rongji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Fujian Rongji
The main advantage of trading using opposite Guangdong Shenglu and Fujian Rongji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Fujian Rongji 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 Fujian Rongji will offset losses from the drop in Fujian Rongji's long position.| Guangdong Shenglu vs. Industrial and Commercial | Guangdong Shenglu vs. China Construction Bank | Guangdong Shenglu vs. Bank of China | Guangdong Shenglu vs. Agricultural Bank of |
| Fujian Rongji vs. Agricultural Bank of | Fujian Rongji vs. Industrial and Commercial | Fujian Rongji vs. Bank of China | Fujian Rongji vs. PetroChina Co Ltd |
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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