Correlation Between Guangzhou Haige and Hubei Yingtong
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By analyzing existing cross correlation between Guangzhou Haige Communications and Hubei Yingtong Telecommunication, you can compare the effects of market volatilities on Guangzhou Haige and Hubei Yingtong 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 Hubei Yingtong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Hubei Yingtong.
Diversification Opportunities for Guangzhou Haige and Hubei Yingtong
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Hubei is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Hubei Yingtong Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Yingtong Telec 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 Hubei Yingtong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Yingtong Telec has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Hubei Yingtong go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Hubei Yingtong
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to under-perform the Hubei Yingtong. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Haige Communications is 1.41 times less risky than Hubei Yingtong. The stock trades about -0.06 of its potential returns per unit of risk. The Hubei Yingtong Telecommunication is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,247 in Hubei Yingtong Telecommunication on September 18, 2024 and sell it today you would earn a total of 144.00 from holding Hubei Yingtong Telecommunication or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Haige Communications vs. Hubei Yingtong Telecommunicati
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Hubei Yingtong Telec |
Guangzhou Haige and Hubei Yingtong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Hubei Yingtong
The main advantage of trading using opposite Guangzhou Haige and Hubei Yingtong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Hubei Yingtong 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 Hubei Yingtong will offset losses from the drop in Hubei Yingtong's long position.| Guangzhou Haige vs. Industrial and Commercial | Guangzhou Haige vs. China Construction Bank | Guangzhou Haige vs. Bank of China | Guangzhou Haige vs. Agricultural Bank of |
| Hubei Yingtong vs. Industrial and Commercial | Hubei Yingtong vs. China Construction Bank | Hubei Yingtong vs. Bank of China | Hubei Yingtong vs. Agricultural Bank of |
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