Correlation Between Sichuan Jinshi and Guangdong Shenglu
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By analyzing existing cross correlation between Sichuan Jinshi Technology and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Sichuan Jinshi and Guangdong Shenglu 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 Sichuan Jinshi with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jinshi and Guangdong Shenglu.
Diversification Opportunities for Sichuan Jinshi and Guangdong Shenglu
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Guangdong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jinshi Technology and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and Sichuan Jinshi 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 Sichuan Jinshi Technology are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Sichuan Jinshi i.e., Sichuan Jinshi and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Sichuan Jinshi and Guangdong Shenglu
Assuming the 90 days trading horizon Sichuan Jinshi Technology is expected to generate 0.89 times more return on investment than Guangdong Shenglu. However, Sichuan Jinshi Technology is 1.12 times less risky than Guangdong Shenglu. It trades about -0.01 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.02 per unit of risk. If you would invest 885.00 in Sichuan Jinshi Technology on September 26, 2024 and sell it today you would lose (209.00) from holding Sichuan Jinshi Technology or give up 23.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Jinshi Technology vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| Sichuan Jinshi Technology |
| Guangdong Shenglu |
Sichuan Jinshi and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jinshi and Guangdong Shenglu
The main advantage of trading using opposite Sichuan Jinshi and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jinshi position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.| Sichuan Jinshi vs. Zijin Mining Group | Sichuan Jinshi vs. Wanhua Chemical Group | Sichuan Jinshi vs. Baoshan Iron Steel | Sichuan Jinshi vs. Shandong Gold Mining |
| Guangdong Shenglu vs. Dongfeng Automobile Co | Guangdong Shenglu vs. China Mobile Limited | Guangdong Shenglu vs. Railway Signal Communication | Guangdong Shenglu vs. Dareway Software 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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