Correlation Between Guangzhou Zhujiang and National Silicon
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and National Silicon Industry, you can compare the effects of market volatilities on Guangzhou Zhujiang and National Silicon 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 National Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and National Silicon.
Diversification Opportunities for Guangzhou Zhujiang and National Silicon
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and National is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and National Silicon Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Silicon Industry 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 National Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Silicon Industry has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and National Silicon go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and National Silicon
Assuming the 90 days trading horizon Guangzhou Zhujiang is expected to generate 1.32 times less return on investment than National Silicon. But when comparing it to its historical volatility, Guangzhou Zhujiang Brewery is 1.73 times less risky than National Silicon. It trades about 0.04 of its potential returns per unit of risk. National Silicon Industry is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,748 in National Silicon Industry on September 19, 2024 and sell it today you would earn a total of 335.00 from holding National Silicon Industry or generate 19.16% 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. National Silicon Industry
Performance |
| Timeline |
| Guangzhou Zhujiang |
| National Silicon Industry |
Guangzhou Zhujiang and National Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and National Silicon
The main advantage of trading using opposite Guangzhou Zhujiang and National Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, National Silicon 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 National Silicon will offset losses from the drop in National Silicon's long position.| Guangzhou Zhujiang vs. Industrial and Commercial | Guangzhou Zhujiang vs. Kweichow Moutai Co | Guangzhou Zhujiang vs. Agricultural Bank of | Guangzhou Zhujiang vs. China Mobile Limited |
| National Silicon vs. Holitech Technology Co | National Silicon vs. Chongqing Brewery Co | National Silicon vs. Spring Airlines Co | National Silicon vs. Guangzhou Zhujiang Brewery |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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