Correlation Between Guangdong Shenglu and Beijing Wantai
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Beijing Wantai Biological, you can compare the effects of market volatilities on Guangdong Shenglu and Beijing Wantai 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 Beijing Wantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Beijing Wantai.
Diversification Opportunities for Guangdong Shenglu and Beijing Wantai
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Beijing is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Beijing Wantai Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wantai Biological 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 Beijing Wantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wantai Biological has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Beijing Wantai go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Beijing Wantai
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to generate 1.41 times more return on investment than Beijing Wantai. However, Guangdong Shenglu is 1.41 times more volatile than Beijing Wantai Biological. It trades about 0.07 of its potential returns per unit of risk. Beijing Wantai Biological is currently generating about 0.04 per unit of risk. If you would invest 596.00 in Guangdong Shenglu Telecommunication on September 3, 2024 and sell it today you would earn a total of 130.00 from holding Guangdong Shenglu Telecommunication or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Beijing Wantai Biological
Performance |
| Timeline |
| Guangdong Shenglu |
| Beijing Wantai Biological |
Guangdong Shenglu and Beijing Wantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Beijing Wantai
The main advantage of trading using opposite Guangdong Shenglu and Beijing Wantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Beijing Wantai 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 Beijing Wantai will offset losses from the drop in Beijing Wantai's long position.| Guangdong Shenglu vs. Agricultural Bank of | Guangdong Shenglu vs. China Construction Bank | Guangdong Shenglu vs. Postal Savings Bank | Guangdong Shenglu vs. Bank of Communications |
| Beijing Wantai vs. Cofoe Medical Technology | Beijing Wantai vs. Guangzhou Boji Medical | Beijing Wantai vs. Qingdao Baheal Medical | Beijing Wantai vs. Double Medical Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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