Correlation Between Guangzhou Zhujiang and Luzhou Lao
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Luzhou Lao Jiao, you can compare the effects of market volatilities on Guangzhou Zhujiang and Luzhou Lao 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 Guangzhou Zhujiang with a short position of Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Luzhou Lao.
Diversification Opportunities for Guangzhou Zhujiang and Luzhou Lao
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Luzhou is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao and Guangzhou Zhujiang 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 Guangzhou Zhujiang Brewery are associated (or correlated) with Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Luzhou Lao go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Luzhou Lao
Assuming the 90 days trading horizon Guangzhou Zhujiang Brewery is expected to generate 0.78 times more return on investment than Luzhou Lao. However, Guangzhou Zhujiang Brewery is 1.28 times less risky than Luzhou Lao. It trades about -0.01 of its potential returns per unit of risk. Luzhou Lao Jiao is currently generating about -0.14 per unit of risk. If you would invest 910.00 in Guangzhou Zhujiang Brewery on September 12, 2024 and sell it today you would lose (4.00) from holding Guangzhou Zhujiang Brewery or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Luzhou Lao Jiao
Performance |
| Timeline |
| Guangzhou Zhujiang |
| Luzhou Lao Jiao |
Guangzhou Zhujiang and Luzhou Lao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Luzhou Lao
The main advantage of trading using opposite Guangzhou Zhujiang and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao's long position.| Guangzhou Zhujiang vs. China Petroleum Chemical | Guangzhou Zhujiang vs. PetroChina Co Ltd | Guangzhou Zhujiang vs. China State Construction | Guangzhou Zhujiang vs. China Railway Group |
| Luzhou Lao vs. Nuode Investment Co | Luzhou Lao vs. Shenzhen Centralcon Investment | Luzhou Lao vs. Anhui Gujing Distillery | Luzhou Lao vs. Gansu Huangtai Wine marketing |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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