Correlation Between Guangzhou Haige and Shandong Hongchuang
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By analyzing existing cross correlation between Guangzhou Haige Communications and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Guangzhou Haige and Shandong Hongchuang 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 Haige with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Shandong Hongchuang.
Diversification Opportunities for Guangzhou Haige and Shandong Hongchuang
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangzhou and Shandong is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Guangzhou Haige 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 Haige Communications are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Shandong Hongchuang
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to under-perform the Shandong Hongchuang. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Haige Communications is 1.93 times less risky than Shandong Hongchuang. The stock trades about -0.52 of its potential returns per unit of risk. The Shandong Hongchuang Aluminum is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 766.00 in Shandong Hongchuang Aluminum on October 12, 2024 and sell it today you would earn a total of 256.00 from holding Shandong Hongchuang Aluminum or generate 33.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guangzhou Haige Communications vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Shandong Hongchuang |
Guangzhou Haige and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Shandong Hongchuang
The main advantage of trading using opposite Guangzhou Haige and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Guangzhou Haige vs. Xinhua Winshare Publishing | Guangzhou Haige vs. Invengo Information Technology | Guangzhou Haige vs. Zhongfu Information | Guangzhou Haige vs. State Grid InformationCommunication |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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