Correlation Between Guangzhou Jointas and Liuzhou Chemical
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By analyzing existing cross correlation between Guangzhou Jointas Chemical and Liuzhou Chemical Industry, you can compare the effects of market volatilities on Guangzhou Jointas 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 Guangzhou Jointas with a short position of Liuzhou Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Jointas and Liuzhou Chemical.
Diversification Opportunities for Guangzhou Jointas and Liuzhou Chemical
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Liuzhou is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Jointas 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 Guangzhou Jointas 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 Jointas 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 Guangzhou Jointas i.e., Guangzhou Jointas and Liuzhou Chemical go up and down completely randomly.
Pair Corralation between Guangzhou Jointas and Liuzhou Chemical
Assuming the 90 days trading horizon Guangzhou Jointas Chemical is expected to under-perform the Liuzhou Chemical. In addition to that, Guangzhou Jointas is 1.31 times more volatile than Liuzhou Chemical Industry. It trades about -0.06 of its total potential returns per unit of risk. Liuzhou Chemical Industry is currently generating about -0.06 per unit of volatility. If you would invest 306.00 in Liuzhou Chemical Industry on September 29, 2024 and sell it today you would lose (13.00) from holding Liuzhou Chemical Industry or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Jointas Chemical vs. Liuzhou Chemical Industry
Performance |
| Timeline |
| Guangzhou Jointas |
| Liuzhou Chemical Industry |
Guangzhou Jointas and Liuzhou Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Jointas and Liuzhou Chemical
The main advantage of trading using opposite Guangzhou Jointas and Liuzhou Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Jointas 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.| Guangzhou Jointas vs. Jiaozuo Wanfang Aluminum | Guangzhou Jointas vs. Ye Chiu Metal | Guangzhou Jointas vs. Western Metal Materials | Guangzhou Jointas vs. Tongyu Communication |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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