Correlation Between Guilin Seamild and Cambricon Technologies
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By analyzing existing cross correlation between Guilin Seamild Foods and Cambricon Technologies Corp, you can compare the effects of market volatilities on Guilin Seamild and Cambricon Technologies 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 Guilin Seamild with a short position of Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guilin Seamild and Cambricon Technologies.
Diversification Opportunities for Guilin Seamild and Cambricon Technologies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guilin and Cambricon is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guilin Seamild Foods and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies and Guilin Seamild 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 Guilin Seamild Foods are associated (or correlated) with Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Guilin Seamild i.e., Guilin Seamild and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Guilin Seamild and Cambricon Technologies
Assuming the 90 days trading horizon Guilin Seamild Foods is expected to generate 0.51 times more return on investment than Cambricon Technologies. However, Guilin Seamild Foods is 1.96 times less risky than Cambricon Technologies. It trades about -0.15 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about -0.1 per unit of risk. If you would invest 1,710 in Guilin Seamild Foods on November 3, 2024 and sell it today you would lose (134.00) from holding Guilin Seamild Foods or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guilin Seamild Foods vs. Cambricon Technologies Corp
Performance |
| Timeline |
| Guilin Seamild Foods |
| Cambricon Technologies |
Guilin Seamild and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guilin Seamild and Cambricon Technologies
The main advantage of trading using opposite Guilin Seamild and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guilin Seamild position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.| Guilin Seamild vs. Hubei Xingfa Chemicals | Guilin Seamild vs. Harbin Air Conditioning | Guilin Seamild vs. Henan Shuanghui Investment | Guilin Seamild vs. MayAir Technology 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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