Correlation Between Kuang Chi and Guosheng Financial
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By analyzing existing cross correlation between Kuang Chi Technologies and Guosheng Financial Holding, you can compare the effects of market volatilities on Kuang Chi and Guosheng Financial 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 Kuang Chi with a short position of Guosheng Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuang Chi and Guosheng Financial.
Diversification Opportunities for Kuang Chi and Guosheng Financial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kuang and Guosheng is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kuang Chi Technologies and Guosheng Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guosheng Financial and Kuang Chi 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 Kuang Chi Technologies are associated (or correlated) with Guosheng Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guosheng Financial has no effect on the direction of Kuang Chi i.e., Kuang Chi and Guosheng Financial go up and down completely randomly.
Pair Corralation between Kuang Chi and Guosheng Financial
Assuming the 90 days trading horizon Kuang Chi Technologies is expected to generate 1.18 times more return on investment than Guosheng Financial. However, Kuang Chi is 1.18 times more volatile than Guosheng Financial Holding. It trades about 0.17 of its potential returns per unit of risk. Guosheng Financial Holding is currently generating about 0.03 per unit of risk. If you would invest 1,168 in Kuang Chi Technologies on August 29, 2024 and sell it today you would earn a total of 2,678 from holding Kuang Chi Technologies or generate 229.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuang Chi Technologies vs. Guosheng Financial Holding
Performance |
| Timeline |
| Kuang Chi Technologies |
| Guosheng Financial |
Kuang Chi and Guosheng Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuang Chi and Guosheng Financial
The main advantage of trading using opposite Kuang Chi and Guosheng Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuang Chi position performs unexpectedly, Guosheng Financial 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 Guosheng Financial will offset losses from the drop in Guosheng Financial's long position.| Kuang Chi vs. Agricultural Bank of | Kuang Chi vs. Industrial and Commercial | Kuang Chi vs. Bank of China | Kuang Chi vs. China Construction Bank |
| Guosheng Financial vs. PetroChina Co Ltd | Guosheng Financial vs. China State Construction | Guosheng Financial vs. China Mobile Limited | Guosheng Financial vs. Industrial and Commercial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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