Correlation Between Guangzhou Jointas and Qijing Machinery
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By analyzing existing cross correlation between Guangzhou Jointas Chemical and Qijing Machinery, you can compare the effects of market volatilities on Guangzhou Jointas and Qijing Machinery 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 Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Jointas and Qijing Machinery.
Diversification Opportunities for Guangzhou Jointas and Qijing Machinery
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Qijing is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Jointas Chemical and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery 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 Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Guangzhou Jointas i.e., Guangzhou Jointas and Qijing Machinery go up and down completely randomly.
Pair Corralation between Guangzhou Jointas and Qijing Machinery
Assuming the 90 days trading horizon Guangzhou Jointas Chemical is expected to under-perform the Qijing Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Jointas Chemical is 1.11 times less risky than Qijing Machinery. The stock trades about -0.32 of its potential returns per unit of risk. The Qijing Machinery is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,405 in Qijing Machinery on October 12, 2024 and sell it today you would lose (118.00) from holding Qijing Machinery or give up 8.4% 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. Qijing Machinery
Performance |
| Timeline |
| Guangzhou Jointas |
| Qijing Machinery |
Guangzhou Jointas and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Jointas and Qijing Machinery
The main advantage of trading using opposite Guangzhou Jointas and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Jointas position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.| Guangzhou Jointas vs. Qumei Furniture Group | Guangzhou Jointas vs. Songz Automobile Air | Guangzhou Jointas vs. Zoy Home Furnishing | Guangzhou Jointas vs. Ningbo Fangzheng Automobile |
| Qijing Machinery vs. Biwin Storage Technology | Qijing Machinery vs. PetroChina Co Ltd | Qijing Machinery vs. Industrial and Commercial | Qijing Machinery 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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