Correlation Between Guangdong Shenglu and Linzhou Heavy
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Linzhou Heavy Machinery, you can compare the effects of market volatilities on Guangdong Shenglu and Linzhou Heavy 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 Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Linzhou Heavy.
Diversification Opportunities for Guangdong Shenglu and Linzhou Heavy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Linzhou is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery 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 Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Linzhou Heavy go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Linzhou Heavy
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Linzhou Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Shenglu Telecommunication is 1.19 times less risky than Linzhou Heavy. The stock trades about -0.02 of its potential returns per unit of risk. The Linzhou Heavy Machinery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 292.00 in Linzhou Heavy Machinery on December 4, 2024 and sell it today you would earn a total of 120.00 from holding Linzhou Heavy Machinery or generate 41.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Linzhou Heavy Machinery
Performance |
| Timeline |
| Guangdong Shenglu |
| Linzhou Heavy Machinery |
Guangdong Shenglu and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Linzhou Heavy
The main advantage of trading using opposite Guangdong Shenglu and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| Guangdong Shenglu vs. Jointo Energy Investment | Guangdong Shenglu vs. Xiamen Insight Investment | Guangdong Shenglu vs. Ningbo Kangqiang Electronics | Guangdong Shenglu vs. Nantong Haixing Electronics |
| Linzhou Heavy vs. Iat Automobile Technology | Linzhou Heavy vs. SSAW Hotels Resorts | Linzhou Heavy vs. Great Sun Foods Co | Linzhou Heavy vs. Xiangpiaopiao Food 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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