Correlation Between Guangzhou Haige and Liaoning Dingjide
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By analyzing existing cross correlation between Guangzhou Haige Communications and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Guangzhou Haige and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Liaoning Dingjide.
Diversification Opportunities for Guangzhou Haige and Liaoning Dingjide
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangzhou and Liaoning is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Liaoning Dingjide
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to under-perform the Liaoning Dingjide. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Haige Communications is 1.93 times less risky than Liaoning Dingjide. The stock trades about -0.39 of its potential returns per unit of risk. The Liaoning Dingjide Petrochemical is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 3,391 in Liaoning Dingjide Petrochemical on October 17, 2024 and sell it today you would lose (362.00) from holding Liaoning Dingjide Petrochemical or give up 10.68% 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. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Liaoning Dingjide |
Guangzhou Haige and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Liaoning Dingjide
The main advantage of trading using opposite Guangzhou Haige and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| Guangzhou Haige vs. Industrial Bank Co | Guangzhou Haige vs. Southern PublishingMedia Co | Guangzhou Haige vs. Thinkingdom Media Group | Guangzhou Haige vs. Hengdian Entertainment Co |
| Liaoning Dingjide vs. Beijing Yanjing Brewery | Liaoning Dingjide vs. Haima Automobile Group | Liaoning Dingjide vs. Suzhou Oriental Semiconductor | Liaoning Dingjide vs. Guangzhou Haige 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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