Correlation Between Guangdong Qunxing and Shanghai Broadband
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By analyzing existing cross correlation between Guangdong Qunxing Toys and Shanghai Broadband Technology, you can compare the effects of market volatilities on Guangdong Qunxing and Shanghai Broadband 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 Guangdong Qunxing with a short position of Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Qunxing and Shanghai Broadband.
Diversification Opportunities for Guangdong Qunxing and Shanghai Broadband
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guangdong and Shanghai is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Qunxing Toys and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband and Guangdong Qunxing 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 Guangdong Qunxing Toys are associated (or correlated) with Shanghai Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Guangdong Qunxing i.e., Guangdong Qunxing and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Guangdong Qunxing and Shanghai Broadband
Assuming the 90 days trading horizon Guangdong Qunxing Toys is expected to generate 1.33 times more return on investment than Shanghai Broadband. However, Guangdong Qunxing is 1.33 times more volatile than Shanghai Broadband Technology. It trades about -0.04 of its potential returns per unit of risk. Shanghai Broadband Technology is currently generating about -0.16 per unit of risk. If you would invest 750.00 in Guangdong Qunxing Toys on October 17, 2024 and sell it today you would lose (45.00) from holding Guangdong Qunxing Toys or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Qunxing Toys vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Guangdong Qunxing Toys |
| Shanghai Broadband |
Guangdong Qunxing and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Qunxing and Shanghai Broadband
The main advantage of trading using opposite Guangdong Qunxing and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Qunxing position performs unexpectedly, Shanghai Broadband 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 Shanghai Broadband will offset losses from the drop in Shanghai Broadband's long position.| Guangdong Qunxing vs. Tieling Newcity Investment | Guangdong Qunxing vs. Ningbo Fangzheng Automobile | Guangdong Qunxing vs. China Mobile Limited | Guangdong Qunxing vs. Shanghai Material Trading |
| Shanghai Broadband vs. Shanghai Action Education | Shanghai Broadband vs. Montage Technology Co | Shanghai Broadband vs. HUAQIN TECHNOLOGY LTD | Shanghai Broadband vs. Guangdong Qunxing Toys |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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