Correlation Between Guangdong Shenglu and Shanxi Lanhua
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Shanxi Lanhua Sci Tech, you can compare the effects of market volatilities on Guangdong Shenglu and Shanxi Lanhua 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 Shanxi Lanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Shanxi Lanhua.
Diversification Opportunities for Guangdong Shenglu and Shanxi Lanhua
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Shanxi is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Shanxi Lanhua Sci Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Lanhua Sci 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 Shanxi Lanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Lanhua Sci has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Shanxi Lanhua go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Shanxi Lanhua
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to generate 1.23 times more return on investment than Shanxi Lanhua. However, Guangdong Shenglu is 1.23 times more volatile than Shanxi Lanhua Sci Tech. It trades about 0.13 of its potential returns per unit of risk. Shanxi Lanhua Sci Tech is currently generating about 0.06 per unit of risk. If you would invest 517.00 in Guangdong Shenglu Telecommunication on September 21, 2024 and sell it today you would earn a total of 212.00 from holding Guangdong Shenglu Telecommunication or generate 41.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Shanxi Lanhua Sci Tech
Performance |
| Timeline |
| Guangdong Shenglu |
| Shanxi Lanhua Sci |
Guangdong Shenglu and Shanxi Lanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Shanxi Lanhua
The main advantage of trading using opposite Guangdong Shenglu and Shanxi Lanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Shanxi Lanhua 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 Shanxi Lanhua will offset losses from the drop in Shanxi Lanhua'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 |
| Shanxi Lanhua vs. Tongyu Communication | Shanxi Lanhua vs. Guangdong Shenglu Telecommunication | Shanxi Lanhua vs. Xinjiang Communications Construction | Shanxi Lanhua vs. Zhongshan Public Utilities |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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