Correlation Between Guangdong Shenglu and Kunshan Guoli
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Kunshan Guoli Electronic, you can compare the effects of market volatilities on Guangdong Shenglu and Kunshan Guoli 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 Kunshan Guoli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Kunshan Guoli.
Diversification Opportunities for Guangdong Shenglu and Kunshan Guoli
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Kunshan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Kunshan Guoli Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunshan Guoli Electronic 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 Kunshan Guoli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunshan Guoli Electronic has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Kunshan Guoli go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Kunshan Guoli
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to generate 0.74 times more return on investment than Kunshan Guoli. However, Guangdong Shenglu Telecommunication is 1.34 times less risky than Kunshan Guoli. It trades about 0.01 of its potential returns per unit of risk. Kunshan Guoli Electronic is currently generating about -0.07 per unit of risk. If you would invest 772.00 in Guangdong Shenglu Telecommunication on September 13, 2024 and sell it today you would lose (2.00) from holding Guangdong Shenglu Telecommunication or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Kunshan Guoli Electronic
Performance |
| Timeline |
| Guangdong Shenglu |
| Kunshan Guoli Electronic |
Guangdong Shenglu and Kunshan Guoli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Kunshan Guoli
The main advantage of trading using opposite Guangdong Shenglu and Kunshan Guoli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Kunshan Guoli 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 Kunshan Guoli will offset losses from the drop in Kunshan Guoli's long position.| Guangdong Shenglu vs. China Railway Materials | Guangdong Shenglu vs. Xinke Material | Guangdong Shenglu vs. Orinko Advanced Plastics | Guangdong Shenglu vs. Chongqing Sulian Plastic |
| Kunshan Guoli vs. Industrial and Commercial | Kunshan Guoli vs. Agricultural Bank of | Kunshan Guoli vs. China Construction Bank | Kunshan Guoli vs. Bank of China |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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