Correlation Between Kuangda Technology and Guangdong Tianhe
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By analyzing existing cross correlation between Kuangda Technology Group and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Kuangda Technology and Guangdong Tianhe 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 Kuangda Technology with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and Guangdong Tianhe.
Diversification Opportunities for Kuangda Technology and Guangdong Tianhe
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kuangda and Guangdong is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and Kuangda Technology 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 Kuangda Technology Group are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Kuangda Technology i.e., Kuangda Technology and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Kuangda Technology and Guangdong Tianhe
Assuming the 90 days trading horizon Kuangda Technology Group is expected to generate 1.12 times more return on investment than Guangdong Tianhe. However, Kuangda Technology is 1.12 times more volatile than Guangdong Tianhe Agricultural. It trades about 0.11 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about 0.04 per unit of risk. If you would invest 364.00 in Kuangda Technology Group on September 26, 2024 and sell it today you would earn a total of 157.00 from holding Kuangda Technology Group or generate 43.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuangda Technology Group vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Kuangda Technology |
| Guangdong Tianhe Agr |
Kuangda Technology and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuangda Technology and Guangdong Tianhe
The main advantage of trading using opposite Kuangda Technology and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Kuangda Technology vs. Eastroc Beverage Group | Kuangda Technology vs. Hubei Dinglong Chemical | Kuangda Technology vs. Guangzhou Seagull Kitchen | Kuangda Technology vs. Guizhou Chanhen Chemical |
| Guangdong Tianhe vs. Zijin Mining Group | Guangdong Tianhe vs. Wanhua Chemical Group | Guangdong Tianhe vs. Baoshan Iron Steel | Guangdong Tianhe vs. Shandong Gold Mining |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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