Correlation Between Hangzhou Weiguang and Guangdong Shenglu
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By analyzing existing cross correlation between Hangzhou Weiguang Electronic and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Hangzhou Weiguang and Guangdong Shenglu 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 Hangzhou Weiguang with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Weiguang and Guangdong Shenglu.
Diversification Opportunities for Hangzhou Weiguang and Guangdong Shenglu
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hangzhou and Guangdong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Weiguang Electronic and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and Hangzhou Weiguang 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 Hangzhou Weiguang Electronic are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Hangzhou Weiguang i.e., Hangzhou Weiguang and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Hangzhou Weiguang and Guangdong Shenglu
Assuming the 90 days trading horizon Hangzhou Weiguang Electronic is expected to generate 0.84 times more return on investment than Guangdong Shenglu. However, Hangzhou Weiguang Electronic is 1.19 times less risky than Guangdong Shenglu. It trades about 0.05 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about 0.01 per unit of risk. If you would invest 2,043 in Hangzhou Weiguang Electronic on September 12, 2024 and sell it today you would earn a total of 590.00 from holding Hangzhou Weiguang Electronic or generate 28.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Weiguang Electronic vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| Hangzhou Weiguang |
| Guangdong Shenglu |
Hangzhou Weiguang and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Weiguang and Guangdong Shenglu
The main advantage of trading using opposite Hangzhou Weiguang and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Weiguang position performs unexpectedly, Guangdong Shenglu 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 Shenglu will offset losses from the drop in Guangdong Shenglu's long position.| Hangzhou Weiguang vs. Agricultural Bank of | Hangzhou Weiguang vs. Industrial and Commercial | Hangzhou Weiguang vs. Bank of China | Hangzhou Weiguang vs. PetroChina Co Ltd |
| Guangdong Shenglu vs. Gansu Jiu Steel | Guangdong Shenglu vs. Shandong Mining Machinery | Guangdong Shenglu vs. Aba Chemicals Corp | Guangdong Shenglu vs. BlueFocus Communication Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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