Correlation Between Guangzhou Tinci and Longxing Chemical
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By analyzing existing cross correlation between Guangzhou Tinci Materials and Longxing Chemical Stock, you can compare the effects of market volatilities on Guangzhou Tinci and Longxing Chemical 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 Guangzhou Tinci with a short position of Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Tinci and Longxing Chemical.
Diversification Opportunities for Guangzhou Tinci and Longxing Chemical
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Longxing is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Tinci Materials and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock and Guangzhou Tinci 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 Guangzhou Tinci Materials are associated (or correlated) with Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Guangzhou Tinci i.e., Guangzhou Tinci and Longxing Chemical go up and down completely randomly.
Pair Corralation between Guangzhou Tinci and Longxing Chemical
Assuming the 90 days trading horizon Guangzhou Tinci Materials is expected to generate 1.92 times more return on investment than Longxing Chemical. However, Guangzhou Tinci is 1.92 times more volatile than Longxing Chemical Stock. It trades about 0.31 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.31 per unit of risk. If you would invest 1,835 in Guangzhou Tinci Materials on September 2, 2024 and sell it today you would earn a total of 634.00 from holding Guangzhou Tinci Materials or generate 34.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Tinci Materials vs. Longxing Chemical Stock
Performance |
| Timeline |
| Guangzhou Tinci Materials |
| Longxing Chemical Stock |
Guangzhou Tinci and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Tinci and Longxing Chemical
The main advantage of trading using opposite Guangzhou Tinci and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Tinci position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Guangzhou Tinci vs. Zijin Mining Group | Guangzhou Tinci vs. Wanhua Chemical Group | Guangzhou Tinci vs. Baoshan Iron Steel | Guangzhou Tinci vs. Shandong Gold Mining |
| Longxing Chemical vs. Suzhou Xingye Material | Longxing Chemical vs. Guangzhou Tinci Materials | Longxing Chemical vs. Nuode Investment Co | Longxing Chemical vs. Henan Shuanghui 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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