Correlation Between Guangzhou Haige and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Guangzhou Haige Communications and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Guangzhou Haige and Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Shenzhen Zhongzhuang.
Diversification Opportunities for Guangzhou Haige and Shenzhen Zhongzhuang
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangzhou and Shenzhen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to under-perform the Shenzhen Zhongzhuang. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Haige Communications is 1.63 times less risky than Shenzhen Zhongzhuang. The stock trades about -0.24 of its potential returns per unit of risk. The Shenzhen Zhongzhuang Construction is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Shenzhen Zhongzhuang Construction on October 30, 2024 and sell it today you would lose (25.00) from holding Shenzhen Zhongzhuang Construction or give up 6.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Haige Communications vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Shenzhen Zhongzhuang |
Guangzhou Haige and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Shenzhen Zhongzhuang
The main advantage of trading using opposite Guangzhou Haige and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang's long position.| Guangzhou Haige vs. Bus Online Co | Guangzhou Haige vs. Holitech Technology Co | Guangzhou Haige vs. Gome Telecom Equipment | Guangzhou Haige vs. Cultural Investment Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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