Correlation Between Guosheng Financial and Changjiang Publishing
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By analyzing existing cross correlation between Guosheng Financial Holding and Changjiang Publishing Media, you can compare the effects of market volatilities on Guosheng Financial and Changjiang Publishing 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 Guosheng Financial with a short position of Changjiang Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guosheng Financial and Changjiang Publishing.
Diversification Opportunities for Guosheng Financial and Changjiang Publishing
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guosheng and Changjiang is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Guosheng Financial Holding and Changjiang Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Publishing and Guosheng Financial 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 Guosheng Financial Holding are associated (or correlated) with Changjiang Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Publishing has no effect on the direction of Guosheng Financial i.e., Guosheng Financial and Changjiang Publishing go up and down completely randomly.
Pair Corralation between Guosheng Financial and Changjiang Publishing
Assuming the 90 days trading horizon Guosheng Financial Holding is expected to generate 2.17 times more return on investment than Changjiang Publishing. However, Guosheng Financial is 2.17 times more volatile than Changjiang Publishing Media. It trades about 0.14 of its potential returns per unit of risk. Changjiang Publishing Media is currently generating about 0.04 per unit of risk. If you would invest 1,162 in Guosheng Financial Holding on September 3, 2024 and sell it today you would earn a total of 118.00 from holding Guosheng Financial Holding or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guosheng Financial Holding vs. Changjiang Publishing Media
Performance |
| Timeline |
| Guosheng Financial |
| Changjiang Publishing |
Guosheng Financial and Changjiang Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guosheng Financial and Changjiang Publishing
The main advantage of trading using opposite Guosheng Financial and Changjiang Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guosheng Financial position performs unexpectedly, Changjiang Publishing 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 Changjiang Publishing will offset losses from the drop in Changjiang Publishing's long position.The idea behind Guosheng Financial Holding and Changjiang Publishing Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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