Correlation Between Guizhou Chanhen and Liuzhou Chemical
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By analyzing existing cross correlation between Guizhou Chanhen Chemical and Liuzhou Chemical Industry, you can compare the effects of market volatilities on Guizhou Chanhen and Liuzhou Chemical 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 Liuzhou Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guizhou Chanhen and Liuzhou Chemical.
Diversification Opportunities for Guizhou Chanhen and Liuzhou Chemical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guizhou and Liuzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guizhou Chanhen Chemical and Liuzhou Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liuzhou Chemical Industry 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 Liuzhou Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liuzhou Chemical Industry has no effect on the direction of Guizhou Chanhen i.e., Guizhou Chanhen and Liuzhou Chemical go up and down completely randomly.
Pair Corralation between Guizhou Chanhen and Liuzhou Chemical
Assuming the 90 days trading horizon Guizhou Chanhen Chemical is expected to under-perform the Liuzhou Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Guizhou Chanhen Chemical is 1.15 times less risky than Liuzhou Chemical. The stock trades about -0.03 of its potential returns per unit of risk. The Liuzhou Chemical Industry is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 258.00 in Liuzhou Chemical Industry on August 24, 2024 and sell it today you would earn a total of 29.00 from holding Liuzhou Chemical Industry or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guizhou Chanhen Chemical vs. Liuzhou Chemical Industry
Performance |
| Timeline |
| Guizhou Chanhen Chemical |
| Liuzhou Chemical Industry |
Guizhou Chanhen and Liuzhou Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guizhou Chanhen and Liuzhou Chemical
The main advantage of trading using opposite Guizhou Chanhen and Liuzhou Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guizhou Chanhen position performs unexpectedly, Liuzhou Chemical 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 Liuzhou Chemical will offset losses from the drop in Liuzhou Chemical's long position.| Guizhou Chanhen vs. Zijin Mining Group | Guizhou Chanhen vs. Wanhua Chemical Group | Guizhou Chanhen vs. Baoshan Iron Steel | Guizhou Chanhen vs. Shandong Gold Mining |
| Liuzhou Chemical vs. Zijin Mining Group | Liuzhou Chemical vs. Wanhua Chemical Group | Liuzhou Chemical vs. Baoshan Iron Steel | Liuzhou Chemical vs. Shandong Gold Mining |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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