Correlation Between Guangzhou KDT and Xiwang Foodstuffs
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By analyzing existing cross correlation between Guangzhou KDT Machinery and Xiwang Foodstuffs Co, you can compare the effects of market volatilities on Guangzhou KDT and Xiwang Foodstuffs 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 Xiwang Foodstuffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KDT and Xiwang Foodstuffs.
Diversification Opportunities for Guangzhou KDT and Xiwang Foodstuffs
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Xiwang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KDT Machinery and Xiwang Foodstuffs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Foodstuffs 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 Xiwang Foodstuffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Foodstuffs has no effect on the direction of Guangzhou KDT i.e., Guangzhou KDT and Xiwang Foodstuffs go up and down completely randomly.
Pair Corralation between Guangzhou KDT and Xiwang Foodstuffs
Assuming the 90 days trading horizon Guangzhou KDT Machinery is expected to generate 0.41 times more return on investment than Xiwang Foodstuffs. However, Guangzhou KDT Machinery is 2.46 times less risky than Xiwang Foodstuffs. It trades about -0.46 of its potential returns per unit of risk. Xiwang Foodstuffs Co is currently generating about -0.37 per unit of risk. If you would invest 1,886 in Guangzhou KDT Machinery on October 12, 2024 and sell it today you would lose (265.00) from holding Guangzhou KDT Machinery or give up 14.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guangzhou KDT Machinery vs. Xiwang Foodstuffs Co
Performance |
| Timeline |
| Guangzhou KDT Machinery |
| Xiwang Foodstuffs |
Guangzhou KDT and Xiwang Foodstuffs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KDT and Xiwang Foodstuffs
The main advantage of trading using opposite Guangzhou KDT and Xiwang Foodstuffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KDT position performs unexpectedly, Xiwang Foodstuffs 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 Xiwang Foodstuffs will offset losses from the drop in Xiwang Foodstuffs' long position.| Guangzhou KDT vs. Xiwang Foodstuffs Co | Guangzhou KDT vs. Jiahe Foods Industry | Guangzhou KDT vs. Xinjiang Beixin RoadBridge | Guangzhou KDT vs. Fujian Longzhou Transportation |
| Xiwang Foodstuffs vs. Shenzhen AV Display Co | Xiwang Foodstuffs vs. Tianshui Huatian Technology | Xiwang Foodstuffs vs. Soyea Technology Co | Xiwang Foodstuffs vs. China Sports Industry |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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