Correlation Between Guangzhou KDT and Dymatic Chemicals
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By analyzing existing cross correlation between Guangzhou KDT Machinery and Dymatic Chemicals, you can compare the effects of market volatilities on Guangzhou KDT and Dymatic Chemicals 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 Dymatic Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KDT and Dymatic Chemicals.
Diversification Opportunities for Guangzhou KDT and Dymatic Chemicals
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Dymatic is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KDT Machinery and Dymatic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dymatic Chemicals 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 Dymatic Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dymatic Chemicals has no effect on the direction of Guangzhou KDT i.e., Guangzhou KDT and Dymatic Chemicals go up and down completely randomly.
Pair Corralation between Guangzhou KDT and Dymatic Chemicals
Assuming the 90 days trading horizon Guangzhou KDT Machinery is expected to generate 1.03 times more return on investment than Dymatic Chemicals. However, Guangzhou KDT is 1.03 times more volatile than Dymatic Chemicals. It trades about 0.03 of its potential returns per unit of risk. Dymatic Chemicals is currently generating about -0.01 per unit of risk. If you would invest 1,336 in Guangzhou KDT Machinery on October 16, 2024 and sell it today you would earn a total of 263.00 from holding Guangzhou KDT Machinery or generate 19.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KDT Machinery vs. Dymatic Chemicals
Performance |
| Timeline |
| Guangzhou KDT Machinery |
| Dymatic Chemicals |
Guangzhou KDT and Dymatic Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KDT and Dymatic Chemicals
The main advantage of trading using opposite Guangzhou KDT and Dymatic Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KDT position performs unexpectedly, Dymatic Chemicals 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 Dymatic Chemicals will offset losses from the drop in Dymatic Chemicals' long position.| Guangzhou KDT vs. Biwin Storage Technology | Guangzhou KDT vs. PetroChina Co Ltd | Guangzhou KDT vs. Industrial and Commercial | Guangzhou KDT vs. China Construction Bank |
| Dymatic Chemicals vs. Guangzhou KDT Machinery | Dymatic Chemicals vs. Anhui Huilong Agricultural | Dymatic Chemicals vs. Sunwave Communications Co | Dymatic Chemicals vs. Huasi Agricultural Development |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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