Correlation Between Hangzhou Weiguang and Guangzhou Shiyuan
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By analyzing existing cross correlation between Hangzhou Weiguang Electronic and Guangzhou Shiyuan Electronic, you can compare the effects of market volatilities on Hangzhou Weiguang and Guangzhou Shiyuan 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 Guangzhou Shiyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Weiguang and Guangzhou Shiyuan.
Diversification Opportunities for Hangzhou Weiguang and Guangzhou Shiyuan
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hangzhou and Guangzhou is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Weiguang Electronic and Guangzhou Shiyuan Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Shiyuan 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 Guangzhou Shiyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Shiyuan has no effect on the direction of Hangzhou Weiguang i.e., Hangzhou Weiguang and Guangzhou Shiyuan go up and down completely randomly.
Pair Corralation between Hangzhou Weiguang and Guangzhou Shiyuan
Assuming the 90 days trading horizon Hangzhou Weiguang Electronic is expected to generate 1.1 times more return on investment than Guangzhou Shiyuan. However, Hangzhou Weiguang is 1.1 times more volatile than Guangzhou Shiyuan Electronic. It trades about 0.03 of its potential returns per unit of risk. Guangzhou Shiyuan Electronic is currently generating about 0.0 per unit of risk. If you would invest 2,259 in Hangzhou Weiguang Electronic on September 14, 2024 and sell it today you would earn a total of 339.00 from holding Hangzhou Weiguang Electronic or generate 15.01% 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. Guangzhou Shiyuan Electronic
Performance |
| Timeline |
| Hangzhou Weiguang |
| Guangzhou Shiyuan |
Hangzhou Weiguang and Guangzhou Shiyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Weiguang and Guangzhou Shiyuan
The main advantage of trading using opposite Hangzhou Weiguang and Guangzhou Shiyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Weiguang position performs unexpectedly, Guangzhou Shiyuan 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 Guangzhou Shiyuan will offset losses from the drop in Guangzhou Shiyuan's long position.| Hangzhou Weiguang vs. PetroChina Co Ltd | Hangzhou Weiguang vs. China Mobile Limited | Hangzhou Weiguang vs. CNOOC Limited | Hangzhou Weiguang vs. Ping An Insurance |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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