Correlation Between Guangdong Shenglu and DR
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and DR Limited, you can compare the effects of market volatilities on Guangdong Shenglu and DR 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 DR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and DR.
Diversification Opportunities for Guangdong Shenglu and DR
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and DR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and DR Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DR Limited 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 DR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DR Limited has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and DR go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and DR
Assuming the 90 days trading horizon Guangdong Shenglu is expected to generate 1.77 times less return on investment than DR. But when comparing it to its historical volatility, Guangdong Shenglu Telecommunication is 1.07 times less risky than DR. It trades about 0.12 of its potential returns per unit of risk. DR Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,250 in DR Limited on September 4, 2024 and sell it today you would earn a total of 275.00 from holding DR Limited or generate 12.22% 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. DR Limited
Performance |
| Timeline |
| Guangdong Shenglu |
| DR Limited |
Guangdong Shenglu and DR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and DR
The main advantage of trading using opposite Guangdong Shenglu and DR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, DR 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 DR will offset losses from the drop in DR's long position.| Guangdong Shenglu vs. Impulse Qingdao Health | Guangdong Shenglu vs. Hangzhou Coco Healthcare | Guangdong Shenglu vs. Andon Health Co | Guangdong Shenglu vs. Integrated Electronic Systems |
| DR vs. Ligao Foods CoLtd | DR vs. Cultural Investment Holdings | DR vs. Harbin Hatou Investment | DR vs. Xiandai Investment 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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