Correlation Between Guosheng Financial and Shanghai Lingyun
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By analyzing existing cross correlation between Guosheng Financial Holding and Shanghai Lingyun Industries, you can compare the effects of market volatilities on Guosheng Financial and Shanghai Lingyun 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 Shanghai Lingyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guosheng Financial and Shanghai Lingyun.
Diversification Opportunities for Guosheng Financial and Shanghai Lingyun
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guosheng and Shanghai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Guosheng Financial Holding and Shanghai Lingyun Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Lingyun Ind 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 Shanghai Lingyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Lingyun Ind has no effect on the direction of Guosheng Financial i.e., Guosheng Financial and Shanghai Lingyun go up and down completely randomly.
Pair Corralation between Guosheng Financial and Shanghai Lingyun
Assuming the 90 days trading horizon Guosheng Financial Holding is expected to generate 0.78 times more return on investment than Shanghai Lingyun. However, Guosheng Financial Holding is 1.29 times less risky than Shanghai Lingyun. It trades about 0.09 of its potential returns per unit of risk. Shanghai Lingyun Industries is currently generating about 0.03 per unit of risk. If you would invest 915.00 in Guosheng Financial Holding on September 14, 2024 and sell it today you would earn a total of 825.00 from holding Guosheng Financial Holding or generate 90.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guosheng Financial Holding vs. Shanghai Lingyun Industries
Performance |
| Timeline |
| Guosheng Financial |
| Shanghai Lingyun Ind |
Guosheng Financial and Shanghai Lingyun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guosheng Financial and Shanghai Lingyun
The main advantage of trading using opposite Guosheng Financial and Shanghai Lingyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guosheng Financial position performs unexpectedly, Shanghai Lingyun 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 Lingyun will offset losses from the drop in Shanghai Lingyun's long position.| Guosheng Financial vs. Leyard Optoelectronic | Guosheng Financial vs. Juneyao Airlines | Guosheng Financial vs. Xinya Electronic Co | Guosheng Financial vs. Epoxy Base Electronic |
| Shanghai Lingyun vs. Zhejiang Qianjiang Motorcycle | Shanghai Lingyun vs. Dongfeng Automobile Co | Shanghai Lingyun vs. Ningbo Fangzheng Automobile | Shanghai Lingyun vs. Xiangyang Automobile Bearing |
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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