Correlation Between Guangdong Shenglu and Qumei Furniture
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Qumei Furniture Group, you can compare the effects of market volatilities on Guangdong Shenglu and Qumei Furniture 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 Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Qumei Furniture.
Diversification Opportunities for Guangdong Shenglu and Qumei Furniture
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Qumei is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Qumei Furniture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qumei Furniture Group 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 Qumei Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qumei Furniture Group has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Qumei Furniture go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Qumei Furniture
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to generate 0.97 times more return on investment than Qumei Furniture. However, Guangdong Shenglu Telecommunication is 1.03 times less risky than Qumei Furniture. It trades about -0.14 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about -0.4 per unit of risk. If you would invest 703.00 in Guangdong Shenglu Telecommunication on October 18, 2024 and sell it today you would lose (60.00) from holding Guangdong Shenglu Telecommunication or give up 8.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Qumei Furniture Group
Performance |
| Timeline |
| Guangdong Shenglu |
| Qumei Furniture Group |
Guangdong Shenglu and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Qumei Furniture
The main advantage of trading using opposite Guangdong Shenglu and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Qumei Furniture 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 Qumei Furniture will offset losses from the drop in Qumei Furniture's long position.| Guangdong Shenglu vs. ZYF Lopsking Aluminum | Guangdong Shenglu vs. Guangdong Jinma Entertainment | Guangdong Shenglu vs. Chengdu B ray Media | Guangdong Shenglu vs. JiShi Media Co |
| Qumei Furniture vs. Tongyu Communication | Qumei Furniture vs. Guangdong Shenglu Telecommunication | Qumei Furniture vs. Nexchip Semiconductor Corp | Qumei Furniture vs. Lontium Semiconductor Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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