Correlation Between Guangzhou Haige and Danhua Chemical
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By analyzing existing cross correlation between Guangzhou Haige Communications and Danhua Chemical Technology, you can compare the effects of market volatilities on Guangzhou Haige and Danhua Chemical 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 Danhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Danhua Chemical.
Diversification Opportunities for Guangzhou Haige and Danhua Chemical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Danhua is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Danhua Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danhua Chemical Tech 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 Danhua Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danhua Chemical Tech has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Danhua Chemical go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Danhua Chemical
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to generate 0.85 times more return on investment than Danhua Chemical. However, Guangzhou Haige Communications is 1.18 times less risky than Danhua Chemical. It trades about 0.05 of its potential returns per unit of risk. Danhua Chemical Technology is currently generating about 0.01 per unit of risk. If you would invest 823.00 in Guangzhou Haige Communications on September 3, 2024 and sell it today you would earn a total of 457.00 from holding Guangzhou Haige Communications or generate 55.53% 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. Danhua Chemical Technology
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Danhua Chemical Tech |
Guangzhou Haige and Danhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Danhua Chemical
The main advantage of trading using opposite Guangzhou Haige and Danhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Danhua Chemical 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 Danhua Chemical will offset losses from the drop in Danhua Chemical'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 |
| Danhua Chemical vs. Hubeiyichang Transportation Group | Danhua Chemical vs. RoadMain T Co | Danhua Chemical vs. Guangzhou Haige Communications | Danhua Chemical vs. Wuhan Yangtze Communication |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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