Correlation Between Guangzhou Zhujiang and Ningxia Building
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Ningxia Building Materials, you can compare the effects of market volatilities on Guangzhou Zhujiang and Ningxia Building 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 Ningxia Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Ningxia Building.
Diversification Opportunities for Guangzhou Zhujiang and Ningxia Building
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Ningxia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Ningxia Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Building Mat 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 Ningxia Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Building Mat has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Ningxia Building go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Ningxia Building
Assuming the 90 days trading horizon Guangzhou Zhujiang Brewery is expected to generate 0.56 times more return on investment than Ningxia Building. However, Guangzhou Zhujiang Brewery is 1.8 times less risky than Ningxia Building. It trades about 0.04 of its potential returns per unit of risk. Ningxia Building Materials is currently generating about -0.01 per unit of risk. If you would invest 798.00 in Guangzhou Zhujiang Brewery on September 4, 2024 and sell it today you would earn a total of 114.00 from holding Guangzhou Zhujiang Brewery or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Ningxia Building Materials
Performance |
| Timeline |
| Guangzhou Zhujiang |
| Ningxia Building Mat |
Guangzhou Zhujiang and Ningxia Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Ningxia Building
The main advantage of trading using opposite Guangzhou Zhujiang and Ningxia Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Ningxia Building 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 Ningxia Building will offset losses from the drop in Ningxia Building's long position.| Guangzhou Zhujiang vs. Hefei Metalforming Mach | Guangzhou Zhujiang vs. Jiangsu Yanghe Brewery | Guangzhou Zhujiang vs. Ye Chiu Metal | Guangzhou Zhujiang vs. Liuzhou Chemical Industry |
| Ningxia Building vs. Guangzhou Zhujiang Brewery | Ningxia Building vs. Dalian Thermal Power | Ningxia Building vs. Shanghai Yanpu Metal | Ningxia Building vs. Zhongshan Public Utilities |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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