Correlation Between Guangzhou Haige and Zhejiang Construction
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By analyzing existing cross correlation between Guangzhou Haige Communications and Zhejiang Construction Investment, you can compare the effects of market volatilities on Guangzhou Haige and Zhejiang Construction 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 Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Zhejiang Construction.
Diversification Opportunities for Guangzhou Haige and Zhejiang Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Zhejiang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Zhejiang Construction
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to generate 0.74 times more return on investment than Zhejiang Construction. However, Guangzhou Haige Communications is 1.35 times less risky than Zhejiang Construction. It trades about 0.17 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about 0.11 per unit of risk. If you would invest 1,131 in Guangzhou Haige Communications on September 1, 2024 and sell it today you would earn a total of 149.00 from holding Guangzhou Haige Communications or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guangzhou Haige Communications vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Zhejiang Construction |
Guangzhou Haige and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Zhejiang Construction
The main advantage of trading using opposite Guangzhou Haige and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Zhejiang Construction 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction's long position.| Guangzhou Haige vs. Industrial and Commercial | Guangzhou Haige vs. Kweichow Moutai Co | Guangzhou Haige vs. Agricultural Bank of | Guangzhou Haige vs. China Mobile Limited |
| Zhejiang Construction vs. Industrial and Commercial | Zhejiang Construction vs. China Construction Bank | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. Agricultural Bank of |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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