Correlation Between Guangzhou Zhujiang and Xinjiang Baodi
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Xinjiang Baodi Mining, you can compare the effects of market volatilities on Guangzhou Zhujiang and Xinjiang Baodi 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 Xinjiang Baodi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Xinjiang Baodi.
Diversification Opportunities for Guangzhou Zhujiang and Xinjiang Baodi
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangzhou and Xinjiang is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Xinjiang Baodi Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Baodi Mining 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 Xinjiang Baodi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Baodi Mining has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Xinjiang Baodi go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Xinjiang Baodi
Assuming the 90 days trading horizon Guangzhou Zhujiang Brewery is expected to generate 0.69 times more return on investment than Xinjiang Baodi. However, Guangzhou Zhujiang Brewery is 1.45 times less risky than Xinjiang Baodi. It trades about 0.03 of its potential returns per unit of risk. Xinjiang Baodi Mining is currently generating about -0.01 per unit of risk. If you would invest 900.00 in Guangzhou Zhujiang Brewery on January 27, 2025 and sell it today you would earn a total of 170.00 from holding Guangzhou Zhujiang Brewery or generate 18.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Xinjiang Baodi Mining
Performance |
| Timeline |
| Guangzhou Zhujiang |
| Xinjiang Baodi Mining |
Guangzhou Zhujiang and Xinjiang Baodi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Xinjiang Baodi
The main advantage of trading using opposite Guangzhou Zhujiang and Xinjiang Baodi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Xinjiang Baodi 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 Xinjiang Baodi will offset losses from the drop in Xinjiang Baodi's long position.| Guangzhou Zhujiang vs. Thunder Software Technology | Guangzhou Zhujiang vs. Shenyang Blue Silver | Guangzhou Zhujiang vs. Fujian Boss Software |
| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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