Correlation Between Guangzhou Haige and Guosheng Financial
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By analyzing existing cross correlation between Guangzhou Haige Communications and Guosheng Financial Holding, you can compare the effects of market volatilities on Guangzhou Haige and Guosheng Financial 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 Guosheng Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Guosheng Financial.
Diversification Opportunities for Guangzhou Haige and Guosheng Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Guosheng is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Guosheng Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guosheng Financial 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 Guosheng Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guosheng Financial has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Guosheng Financial go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Guosheng Financial
Assuming the 90 days trading horizon Guangzhou Haige is expected to generate 1.18 times less return on investment than Guosheng Financial. But when comparing it to its historical volatility, Guangzhou Haige Communications is 1.24 times less risky than Guosheng Financial. It trades about 0.05 of its potential returns per unit of risk. Guosheng Financial Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 801.00 in Guosheng Financial Holding on September 3, 2024 and sell it today you would earn a total of 479.00 from holding Guosheng Financial Holding or generate 59.8% 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. Guosheng Financial Holding
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Guosheng Financial |
Guangzhou Haige and Guosheng Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Guosheng Financial
The main advantage of trading using opposite Guangzhou Haige and Guosheng Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Guosheng Financial 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 Guosheng Financial will offset losses from the drop in Guosheng Financial's long position.| Guangzhou Haige vs. Agricultural Bank of | Guangzhou Haige vs. China Construction Bank | Guangzhou Haige vs. Postal Savings Bank | Guangzhou Haige vs. Bank of Communications |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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