Correlation Between Guangzhou Zhujiang and Taihai Manoir
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Taihai Manoir Nuclear, you can compare the effects of market volatilities on Guangzhou Zhujiang and Taihai Manoir 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 Taihai Manoir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Taihai Manoir.
Diversification Opportunities for Guangzhou Zhujiang and Taihai Manoir
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Taihai is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Taihai Manoir Nuclear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taihai Manoir Nuclear 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 Taihai Manoir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taihai Manoir Nuclear has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Taihai Manoir go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Taihai Manoir
Assuming the 90 days trading horizon Guangzhou Zhujiang is expected to generate 6.86 times less return on investment than Taihai Manoir. But when comparing it to its historical volatility, Guangzhou Zhujiang Brewery is 3.79 times less risky than Taihai Manoir. It trades about 0.09 of its potential returns per unit of risk. Taihai Manoir Nuclear is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 473.00 in Taihai Manoir Nuclear on September 13, 2024 and sell it today you would earn a total of 78.00 from holding Taihai Manoir Nuclear or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Taihai Manoir Nuclear
Performance |
| Timeline |
| Guangzhou Zhujiang |
| Taihai Manoir Nuclear |
Guangzhou Zhujiang and Taihai Manoir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Taihai Manoir
The main advantage of trading using opposite Guangzhou Zhujiang and Taihai Manoir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Taihai Manoir 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 Taihai Manoir will offset losses from the drop in Taihai Manoir's long position.The idea behind Guangzhou Zhujiang Brewery and Taihai Manoir Nuclear pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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