Correlation Between Guangzhou Zhujiang and Runjian Communication
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Runjian Communication Co, you can compare the effects of market volatilities on Guangzhou Zhujiang and Runjian Communication 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 Runjian Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Runjian Communication.
Diversification Opportunities for Guangzhou Zhujiang and Runjian Communication
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Runjian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Runjian Communication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runjian Communication 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 Runjian Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runjian Communication has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Runjian Communication go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Runjian Communication
Assuming the 90 days trading horizon Guangzhou Zhujiang Brewery is expected to under-perform the Runjian Communication. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Zhujiang Brewery is 2.56 times less risky than Runjian Communication. The stock trades about -0.33 of its potential returns per unit of risk. The Runjian Communication Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,430 in Runjian Communication Co on October 28, 2024 and sell it today you would lose (71.00) from holding Runjian Communication Co or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Runjian Communication Co
Performance |
| Timeline |
| Guangzhou Zhujiang |
| Runjian Communication |
Guangzhou Zhujiang and Runjian Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Runjian Communication
The main advantage of trading using opposite Guangzhou Zhujiang and Runjian Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Runjian Communication 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 Runjian Communication will offset losses from the drop in Runjian Communication's long position.| Guangzhou Zhujiang vs. Agricultural Bank of | Guangzhou Zhujiang vs. Industrial and Commercial | Guangzhou Zhujiang vs. Bank of China | Guangzhou Zhujiang vs. China Construction Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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