Correlation Between Runjian Communication and GUOMAI Culture
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By analyzing existing cross correlation between Runjian Communication Co and GUOMAI Culture Media, you can compare the effects of market volatilities on Runjian Communication and GUOMAI Culture 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 Runjian Communication with a short position of GUOMAI Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runjian Communication and GUOMAI Culture.
Diversification Opportunities for Runjian Communication and GUOMAI Culture
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Runjian and GUOMAI is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Runjian Communication Co and GUOMAI Culture Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUOMAI Culture Media and Runjian Communication 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 Runjian Communication Co are associated (or correlated) with GUOMAI Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUOMAI Culture Media has no effect on the direction of Runjian Communication i.e., Runjian Communication and GUOMAI Culture go up and down completely randomly.
Pair Corralation between Runjian Communication and GUOMAI Culture
Assuming the 90 days trading horizon Runjian Communication Co is expected to under-perform the GUOMAI Culture. But the stock apears to be less risky and, when comparing its historical volatility, Runjian Communication Co is 1.5 times less risky than GUOMAI Culture. The stock trades about -0.02 of its potential returns per unit of risk. The GUOMAI Culture Media is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,642 in GUOMAI Culture Media on October 16, 2024 and sell it today you would lose (1,346) from holding GUOMAI Culture Media or give up 36.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Runjian Communication Co vs. GUOMAI Culture Media
Performance |
| Timeline |
| Runjian Communication |
| GUOMAI Culture Media |
Runjian Communication and GUOMAI Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runjian Communication and GUOMAI Culture
The main advantage of trading using opposite Runjian Communication and GUOMAI Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runjian Communication position performs unexpectedly, GUOMAI Culture 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 GUOMAI Culture will offset losses from the drop in GUOMAI Culture's long position.The idea behind Runjian Communication Co and GUOMAI Culture Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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