Correlation Between Guangzhou KDT and Guizhou Chanhen
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By analyzing existing cross correlation between Guangzhou KDT Machinery and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Guangzhou KDT and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KDT and Guizhou Chanhen.
Diversification Opportunities for Guangzhou KDT and Guizhou Chanhen
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangzhou and Guizhou is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KDT Machinery and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Guangzhou KDT i.e., Guangzhou KDT and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Guangzhou KDT and Guizhou Chanhen
Assuming the 90 days trading horizon Guangzhou KDT Machinery is expected to generate 0.93 times more return on investment than Guizhou Chanhen. However, Guangzhou KDT Machinery is 1.07 times less risky than Guizhou Chanhen. It trades about 0.03 of its potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about -0.01 per unit of risk. If you would invest 1,343 in Guangzhou KDT Machinery on October 26, 2024 and sell it today you would earn a total of 401.00 from holding Guangzhou KDT Machinery or generate 29.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KDT Machinery vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Guangzhou KDT Machinery |
| Guizhou Chanhen Chemical |
Guangzhou KDT and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KDT and Guizhou Chanhen
The main advantage of trading using opposite Guangzhou KDT and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KDT position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Guangzhou KDT vs. PetroChina Co Ltd | Guangzhou KDT vs. Industrial and Commercial | Guangzhou KDT vs. China Petroleum Chemical | Guangzhou KDT vs. China Construction Bank |
| Guizhou Chanhen vs. Central Plains Environment | Guizhou Chanhen vs. GreenTech Environmental Co | Guizhou Chanhen vs. Fujian Nanwang Environment | Guizhou Chanhen vs. Eit Environmental 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 CEOs Directory module to screen CEOs from public companies around the world.
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