Correlation Between Guosheng Financial and Zhangjiagang Freetrade
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By analyzing existing cross correlation between Guosheng Financial Holding and Zhangjiagang Freetrade Science, you can compare the effects of market volatilities on Guosheng Financial and Zhangjiagang Freetrade 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 Zhangjiagang Freetrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guosheng Financial and Zhangjiagang Freetrade.
Diversification Opportunities for Guosheng Financial and Zhangjiagang Freetrade
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guosheng and Zhangjiagang is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Guosheng Financial Holding and Zhangjiagang Freetrade Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangjiagang Freetrade 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 Zhangjiagang Freetrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangjiagang Freetrade has no effect on the direction of Guosheng Financial i.e., Guosheng Financial and Zhangjiagang Freetrade go up and down completely randomly.
Pair Corralation between Guosheng Financial and Zhangjiagang Freetrade
Assuming the 90 days trading horizon Guosheng Financial Holding is expected to generate 2.21 times more return on investment than Zhangjiagang Freetrade. However, Guosheng Financial is 2.21 times more volatile than Zhangjiagang Freetrade Science. It trades about 0.09 of its potential returns per unit of risk. Zhangjiagang Freetrade Science is currently generating about 0.02 per unit of risk. If you would invest 1,283 in Guosheng Financial Holding on November 7, 2024 and sell it today you would earn a total of 59.00 from holding Guosheng Financial Holding or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guosheng Financial Holding vs. Zhangjiagang Freetrade Science
Performance |
| Timeline |
| Guosheng Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Zhangjiagang Freetrade |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guosheng Financial and Zhangjiagang Freetrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guosheng Financial and Zhangjiagang Freetrade
The main advantage of trading using opposite Guosheng Financial and Zhangjiagang Freetrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guosheng Financial position performs unexpectedly, Zhangjiagang Freetrade 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 Zhangjiagang Freetrade will offset losses from the drop in Zhangjiagang Freetrade's long position.The idea behind Guosheng Financial Holding and Zhangjiagang Freetrade Science 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.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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