Correlation Between Hubei Yingtong and Guangzhou Haige
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By analyzing existing cross correlation between Hubei Yingtong Telecommunication and Guangzhou Haige Communications, you can compare the effects of market volatilities on Hubei Yingtong and Guangzhou Haige 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 Hubei Yingtong with a short position of Guangzhou Haige. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Yingtong and Guangzhou Haige.
Diversification Opportunities for Hubei Yingtong and Guangzhou Haige
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubei and Guangzhou is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Yingtong Telecommunicati and Guangzhou Haige Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haige Comm and Hubei Yingtong 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 Hubei Yingtong Telecommunication are associated (or correlated) with Guangzhou Haige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haige Comm has no effect on the direction of Hubei Yingtong i.e., Hubei Yingtong and Guangzhou Haige go up and down completely randomly.
Pair Corralation between Hubei Yingtong and Guangzhou Haige
Assuming the 90 days trading horizon Hubei Yingtong Telecommunication is expected to generate 1.41 times more return on investment than Guangzhou Haige. However, Hubei Yingtong is 1.41 times more volatile than Guangzhou Haige Communications. It trades about 0.14 of its potential returns per unit of risk. Guangzhou Haige Communications is currently generating about -0.06 per unit of risk. If you would invest 1,247 in Hubei Yingtong Telecommunication on September 18, 2024 and sell it today you would earn a total of 144.00 from holding Hubei Yingtong Telecommunication or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Yingtong Telecommunicati vs. Guangzhou Haige Communications
Performance |
| Timeline |
| Hubei Yingtong Telec |
| Guangzhou Haige Comm |
Hubei Yingtong and Guangzhou Haige Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Yingtong and Guangzhou Haige
The main advantage of trading using opposite Hubei Yingtong and Guangzhou Haige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Yingtong position performs unexpectedly, Guangzhou Haige 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 Guangzhou Haige will offset losses from the drop in Guangzhou Haige's long position.| Hubei Yingtong vs. Industrial and Commercial | Hubei Yingtong vs. China Construction Bank | Hubei Yingtong vs. Bank of China | Hubei Yingtong vs. Agricultural Bank of |
| Guangzhou Haige vs. Industrial and Commercial | Guangzhou Haige vs. China Construction Bank | Guangzhou Haige vs. Bank of China | Guangzhou Haige vs. Agricultural Bank of |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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