Correlation Between Guizhou Chanhen and Guangzhou Restaurants
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By analyzing existing cross correlation between Guizhou Chanhen Chemical and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Guizhou Chanhen and Guangzhou Restaurants 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 Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guizhou Chanhen and Guangzhou Restaurants.
Diversification Opportunities for Guizhou Chanhen and Guangzhou Restaurants
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guizhou and Guangzhou is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guizhou Chanhen Chemical and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Guizhou Chanhen i.e., Guizhou Chanhen and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Guizhou Chanhen and Guangzhou Restaurants
Assuming the 90 days trading horizon Guizhou Chanhen Chemical is expected to generate 1.6 times more return on investment than Guangzhou Restaurants. However, Guizhou Chanhen is 1.6 times more volatile than Guangzhou Restaurants Group. It trades about 0.14 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about 0.09 per unit of risk. If you would invest 2,125 in Guizhou Chanhen Chemical on September 1, 2024 and sell it today you would earn a total of 177.00 from holding Guizhou Chanhen Chemical or generate 8.33% 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. Guangzhou Restaurants Group
Performance |
| Timeline |
| Guizhou Chanhen Chemical |
| Guangzhou Restaurants |
Guizhou Chanhen and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guizhou Chanhen and Guangzhou Restaurants
The main advantage of trading using opposite Guizhou Chanhen and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guizhou Chanhen position performs unexpectedly, Guangzhou Restaurants 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 Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.| Guizhou Chanhen vs. GKHT Medical Technology | Guizhou Chanhen vs. Shanghai Jinfeng Wine | Guizhou Chanhen vs. Guangdong Qunxing Toys | Guizhou Chanhen vs. Ningbo David Medical |
| Guangzhou Restaurants vs. China State Construction | Guangzhou Restaurants vs. Poly Real Estate | Guangzhou Restaurants vs. China Vanke Co | Guangzhou Restaurants vs. China Merchants Shekou |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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