Correlation Between Guangzhou Jointas and Zhangzhou Pientzehuang
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By analyzing existing cross correlation between Guangzhou Jointas Chemical and Zhangzhou Pientzehuang Pharmaceutical, you can compare the effects of market volatilities on Guangzhou Jointas and Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Jointas and Zhangzhou Pientzehuang.
Diversification Opportunities for Guangzhou Jointas and Zhangzhou Pientzehuang
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Zhangzhou is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Jointas Chemical and Zhangzhou Pientzehuang Pharmac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangzhou Pientzehuang has no effect on the direction of Guangzhou Jointas i.e., Guangzhou Jointas and Zhangzhou Pientzehuang go up and down completely randomly.
Pair Corralation between Guangzhou Jointas and Zhangzhou Pientzehuang
Assuming the 90 days trading horizon Guangzhou Jointas Chemical is expected to under-perform the Zhangzhou Pientzehuang. In addition to that, Guangzhou Jointas is 1.35 times more volatile than Zhangzhou Pientzehuang Pharmaceutical. It trades about -0.02 of its total potential returns per unit of risk. Zhangzhou Pientzehuang Pharmaceutical is currently generating about -0.02 per unit of volatility. If you would invest 28,665 in Zhangzhou Pientzehuang Pharmaceutical on September 12, 2024 and sell it today you would lose (6,166) from holding Zhangzhou Pientzehuang Pharmaceutical or give up 21.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Jointas Chemical vs. Zhangzhou Pientzehuang Pharmac
Performance |
| Timeline |
| Guangzhou Jointas |
| Zhangzhou Pientzehuang |
Guangzhou Jointas and Zhangzhou Pientzehuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Jointas and Zhangzhou Pientzehuang
The main advantage of trading using opposite Guangzhou Jointas and Zhangzhou Pientzehuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Jointas position performs unexpectedly, Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang will offset losses from the drop in Zhangzhou Pientzehuang's long position.| Guangzhou Jointas vs. Zijin Mining Group | Guangzhou Jointas vs. Wanhua Chemical Group | Guangzhou Jointas vs. Baoshan Iron Steel | Guangzhou Jointas vs. Rongsheng Petrochemical Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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