Correlation Between Guangzhou Haige and Shandong Polymer
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By analyzing existing cross correlation between Guangzhou Haige Communications and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Guangzhou Haige and Shandong Polymer 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 Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Shandong Polymer.
Diversification Opportunities for Guangzhou Haige and Shandong Polymer
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Shandong is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio 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 Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Shandong Polymer go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Shandong Polymer
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to under-perform the Shandong Polymer. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Haige Communications is 1.06 times less risky than Shandong Polymer. The stock trades about -0.01 of its potential returns per unit of risk. The Shandong Polymer Biochemicals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 390.00 in Shandong Polymer Biochemicals on October 14, 2024 and sell it today you would earn a total of 11.00 from holding Shandong Polymer Biochemicals or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Haige Communications vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Shandong Polymer Bio |
Guangzhou Haige and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Shandong Polymer
The main advantage of trading using opposite Guangzhou Haige and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Shandong Polymer 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 Polymer will offset losses from the drop in Shandong Polymer's long position.| Guangzhou Haige vs. Uroica Mining Safety | Guangzhou Haige vs. ButOne Information Corp | Guangzhou Haige vs. Zhengzhou Coal Mining | Guangzhou Haige vs. Longmaster Information Tech |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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