Correlation Between Guizhou Chanhen and Guangzhou KDT
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By analyzing existing cross correlation between Guizhou Chanhen Chemical and Guangzhou KDT Machinery, you can compare the effects of market volatilities on Guizhou Chanhen and Guangzhou KDT 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 Guizhou Chanhen with a short position of Guangzhou KDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guizhou Chanhen and Guangzhou KDT.
Diversification Opportunities for Guizhou Chanhen and Guangzhou KDT
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guizhou and Guangzhou is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Guizhou Chanhen Chemical and Guangzhou KDT Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KDT Machinery and Guizhou Chanhen 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 Guizhou Chanhen Chemical are associated (or correlated) with Guangzhou KDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KDT Machinery has no effect on the direction of Guizhou Chanhen i.e., Guizhou Chanhen and Guangzhou KDT go up and down completely randomly.
Pair Corralation between Guizhou Chanhen and Guangzhou KDT
Assuming the 90 days trading horizon Guizhou Chanhen Chemical is expected to under-perform the Guangzhou KDT. In addition to that, Guizhou Chanhen is 1.07 times more volatile than Guangzhou KDT Machinery. It trades about -0.01 of its total potential returns per unit of risk. Guangzhou KDT Machinery is currently generating about 0.03 per unit of volatility. If you would invest 1,343 in Guangzhou KDT Machinery on October 27, 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 |
Guizhou Chanhen Chemical vs. Guangzhou KDT Machinery
Performance |
| Timeline |
| Guizhou Chanhen Chemical |
| Guangzhou KDT Machinery |
Guizhou Chanhen and Guangzhou KDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guizhou Chanhen and Guangzhou KDT
The main advantage of trading using opposite Guizhou Chanhen and Guangzhou KDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guizhou Chanhen position performs unexpectedly, Guangzhou KDT 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 KDT will offset losses from the drop in Guangzhou KDT's long position.| Guizhou Chanhen vs. Central Plains Environment | Guizhou Chanhen vs. GreenTech Environmental Co | Guizhou Chanhen vs. Fujian Nanwang Environment | Guizhou Chanhen vs. Eit Environmental Development |
| Guangzhou KDT vs. PetroChina Co Ltd | Guangzhou KDT vs. Industrial and Commercial | Guangzhou KDT vs. China Petroleum Chemical | Guangzhou KDT vs. China Construction Bank |
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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