Correlation Between Guangzhou Tinci and Suzhou Weizhixiang
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By analyzing existing cross correlation between Guangzhou Tinci Materials and Suzhou Weizhixiang Food, you can compare the effects of market volatilities on Guangzhou Tinci and Suzhou Weizhixiang 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 Suzhou Weizhixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Tinci and Suzhou Weizhixiang.
Diversification Opportunities for Guangzhou Tinci and Suzhou Weizhixiang
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Suzhou is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Tinci Materials and Suzhou Weizhixiang Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Weizhixiang Food 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 Suzhou Weizhixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Weizhixiang Food has no effect on the direction of Guangzhou Tinci i.e., Guangzhou Tinci and Suzhou Weizhixiang go up and down completely randomly.
Pair Corralation between Guangzhou Tinci and Suzhou Weizhixiang
Assuming the 90 days trading horizon Guangzhou Tinci Materials is expected to generate 1.46 times more return on investment than Suzhou Weizhixiang. However, Guangzhou Tinci is 1.46 times more volatile than Suzhou Weizhixiang Food. It trades about 0.22 of its potential returns per unit of risk. Suzhou Weizhixiang Food is currently generating about 0.19 per unit of risk. If you would invest 1,395 in Guangzhou Tinci Materials on September 2, 2024 and sell it today you would earn a total of 1,074 from holding Guangzhou Tinci Materials or generate 76.99% 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. Suzhou Weizhixiang Food
Performance |
| Timeline |
| Guangzhou Tinci Materials |
| Suzhou Weizhixiang Food |
Guangzhou Tinci and Suzhou Weizhixiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Tinci and Suzhou Weizhixiang
The main advantage of trading using opposite Guangzhou Tinci and Suzhou Weizhixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Tinci position performs unexpectedly, Suzhou Weizhixiang 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 Suzhou Weizhixiang will offset losses from the drop in Suzhou Weizhixiang'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 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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