Correlation Between Guangdong Shenglu and Wuhan Yangtze
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Guangdong Shenglu and Wuhan Yangtze 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 Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Wuhan Yangtze.
Diversification Opportunities for Guangdong Shenglu and Wuhan Yangtze
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Wuhan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun 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 Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Wuhan Yangtze
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Wuhan Yangtze. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Shenglu Telecommunication is 1.99 times less risky than Wuhan Yangtze. The stock trades about -0.01 of its potential returns per unit of risk. The Wuhan Yangtze Communication is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,963 in Wuhan Yangtze Communication on August 29, 2024 and sell it today you would earn a total of 622.00 from holding Wuhan Yangtze Communication or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Guangdong Shenglu |
| Wuhan Yangtze Commun |
Guangdong Shenglu and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Wuhan Yangtze
The main advantage of trading using opposite Guangdong Shenglu and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze's long position.| Guangdong Shenglu vs. Shenzhen MYS Environmental | Guangdong Shenglu vs. AVIC Fund Management | Guangdong Shenglu vs. Shenzhen Bingchuan Network | Guangdong Shenglu vs. Penghua Shenzhen Energy |
| Wuhan Yangtze vs. Yankershop Food Co | Wuhan Yangtze vs. Youyou Foods Co | Wuhan Yangtze vs. Great Sun Foods Co | Wuhan Yangtze vs. Harbin Air Conditioning |
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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