Correlation Between Guangzhou Tinci and Fuda Alloy
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By analyzing existing cross correlation between Guangzhou Tinci Materials and Fuda Alloy Materials, you can compare the effects of market volatilities on Guangzhou Tinci and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Tinci and Fuda Alloy.
Diversification Opportunities for Guangzhou Tinci and Fuda Alloy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Fuda is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Tinci Materials and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of Guangzhou Tinci i.e., Guangzhou Tinci and Fuda Alloy go up and down completely randomly.
Pair Corralation between Guangzhou Tinci and Fuda Alloy
Assuming the 90 days trading horizon Guangzhou Tinci Materials is expected to generate 1.91 times more return on investment than Fuda Alloy. However, Guangzhou Tinci is 1.91 times more volatile than Fuda Alloy Materials. It trades about 0.27 of its potential returns per unit of risk. Fuda Alloy Materials is currently generating about -0.17 per unit of risk. If you would invest 1,875 in Guangzhou Tinci Materials on August 27, 2024 and sell it today you would earn a total of 503.00 from holding Guangzhou Tinci Materials or generate 26.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Tinci Materials vs. Fuda Alloy Materials
Performance |
| Timeline |
| Guangzhou Tinci Materials |
| Fuda Alloy Materials |
Guangzhou Tinci and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Tinci and Fuda Alloy
The main advantage of trading using opposite Guangzhou Tinci and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Tinci position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy'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 |
| Fuda Alloy vs. Hangzhou Pinming Software | Fuda Alloy vs. China National Software | Fuda Alloy vs. Contec Medical Systems | Fuda Alloy vs. Shenzhen Glory Medical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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