Correlation Between Guangzhou KDT and China Union
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By analyzing existing cross correlation between Guangzhou KDT Machinery and China Union Holdings, you can compare the effects of market volatilities on Guangzhou KDT and China Union 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 KDT with a short position of China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KDT and China Union.
Diversification Opportunities for Guangzhou KDT and China Union
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and China is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KDT Machinery and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings and Guangzhou KDT 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 KDT Machinery are associated (or correlated) with China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Guangzhou KDT i.e., Guangzhou KDT and China Union go up and down completely randomly.
Pair Corralation between Guangzhou KDT and China Union
Assuming the 90 days trading horizon Guangzhou KDT Machinery is expected to generate 0.49 times more return on investment than China Union. However, Guangzhou KDT Machinery is 2.05 times less risky than China Union. It trades about 0.34 of its potential returns per unit of risk. China Union Holdings is currently generating about 0.12 per unit of risk. If you would invest 1,605 in Guangzhou KDT Machinery on November 6, 2024 and sell it today you would earn a total of 127.00 from holding Guangzhou KDT Machinery or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KDT Machinery vs. China Union Holdings
Performance |
| Timeline |
| Guangzhou KDT Machinery |
| China Union Holdings |
Guangzhou KDT and China Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KDT and China Union
The main advantage of trading using opposite Guangzhou KDT and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KDT position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.| Guangzhou KDT vs. Fujian Oriental Silver | Guangzhou KDT vs. Shijiazhuang Tonhe Electronics | Guangzhou KDT vs. JCHX Mining Management | Guangzhou KDT vs. Pengxin International Mining |
| China Union vs. Ye Chiu Metal | China Union vs. Shandong Hongchuang Aluminum | China Union vs. China Aluminum International | China Union vs. Western Metal Materials |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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