Correlation Between Guangzhou KDT and Der International
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By analyzing existing cross correlation between Guangzhou KDT Machinery and Der International Home, you can compare the effects of market volatilities on Guangzhou KDT and Der International 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 Der International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KDT and Der International.
Diversification Opportunities for Guangzhou KDT and Der International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Der is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KDT Machinery and Der International Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Der International Home 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 Der International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Der International Home has no effect on the direction of Guangzhou KDT i.e., Guangzhou KDT and Der International go up and down completely randomly.
Pair Corralation between Guangzhou KDT and Der International
Assuming the 90 days trading horizon Guangzhou KDT Machinery is expected to generate 0.79 times more return on investment than Der International. However, Guangzhou KDT Machinery is 1.27 times less risky than Der International. It trades about 0.03 of its potential returns per unit of risk. Der International Home is currently generating about -0.02 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KDT Machinery vs. Der International Home
Performance |
| Timeline |
| Guangzhou KDT Machinery |
| Der International Home |
Guangzhou KDT and Der International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KDT and Der International
The main advantage of trading using opposite Guangzhou KDT and Der International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KDT position performs unexpectedly, Der International 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 Der International will offset losses from the drop in Der International's 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 |
| Der International vs. GuoChuang Software Co | Der International vs. Cansino Biologics | Der International vs. Fujian Boss Software | Der International vs. Guangzhou KDT Machinery |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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