Correlation Between Sichuan Jiuyuan and Guangdong Wens
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By analyzing existing cross correlation between Sichuan Jiuyuan Yinhai and Guangdong Wens Foodstuff, you can compare the effects of market volatilities on Sichuan Jiuyuan and Guangdong Wens 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 Sichuan Jiuyuan with a short position of Guangdong Wens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jiuyuan and Guangdong Wens.
Diversification Opportunities for Sichuan Jiuyuan and Guangdong Wens
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Guangdong is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jiuyuan Yinhai and Guangdong Wens Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Wens Foodstuff and Sichuan Jiuyuan 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 Sichuan Jiuyuan Yinhai are associated (or correlated) with Guangdong Wens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Wens Foodstuff has no effect on the direction of Sichuan Jiuyuan i.e., Sichuan Jiuyuan and Guangdong Wens go up and down completely randomly.
Pair Corralation between Sichuan Jiuyuan and Guangdong Wens
Assuming the 90 days trading horizon Sichuan Jiuyuan Yinhai is expected to under-perform the Guangdong Wens. In addition to that, Sichuan Jiuyuan is 1.72 times more volatile than Guangdong Wens Foodstuff. It trades about -0.01 of its total potential returns per unit of risk. Guangdong Wens Foodstuff is currently generating about -0.01 per unit of volatility. If you would invest 1,975 in Guangdong Wens Foodstuff on September 4, 2024 and sell it today you would lose (233.00) from holding Guangdong Wens Foodstuff or give up 11.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Sichuan Jiuyuan Yinhai vs. Guangdong Wens Foodstuff
Performance |
| Timeline |
| Sichuan Jiuyuan Yinhai |
| Guangdong Wens Foodstuff |
Sichuan Jiuyuan and Guangdong Wens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jiuyuan and Guangdong Wens
The main advantage of trading using opposite Sichuan Jiuyuan and Guangdong Wens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jiuyuan position performs unexpectedly, Guangdong Wens 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 Guangdong Wens will offset losses from the drop in Guangdong Wens' long position.| Sichuan Jiuyuan vs. Guangdong Wens Foodstuff | Sichuan Jiuyuan vs. Anhui Gujing Distillery | Sichuan Jiuyuan vs. Xiwang Foodstuffs Co | Sichuan Jiuyuan vs. HaiXin Foods Co |
| Guangdong Wens vs. Lingyuan Iron Steel | Guangdong Wens vs. Changjiang Publishing Media | Guangdong Wens vs. StarPower Semiconductor | Guangdong Wens vs. Semiconductor Manufacturing Electronics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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