Correlation Between Elite Color and Guangdong Tianhe
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By analyzing existing cross correlation between Elite Color Environmental and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Elite Color and Guangdong Tianhe 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 Elite Color with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Color and Guangdong Tianhe.
Diversification Opportunities for Elite Color and Guangdong Tianhe
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elite and Guangdong is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Elite Color Environmental and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and Elite Color 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 Elite Color Environmental are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Elite Color i.e., Elite Color and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Elite Color and Guangdong Tianhe
Assuming the 90 days trading horizon Elite Color Environmental is expected to generate 0.86 times more return on investment than Guangdong Tianhe. However, Elite Color Environmental is 1.16 times less risky than Guangdong Tianhe. It trades about 0.01 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about -0.03 per unit of risk. If you would invest 654.00 in Elite Color Environmental on September 26, 2024 and sell it today you would lose (43.00) from holding Elite Color Environmental or give up 6.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Color Environmental vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Elite Color Environmental |
| Guangdong Tianhe Agr |
Elite Color and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Color and Guangdong Tianhe
The main advantage of trading using opposite Elite Color and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Color position performs unexpectedly, Guangdong Tianhe 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 Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Elite Color vs. Air China Ltd | Elite Color vs. Ningxia Younglight Chemicals | Elite Color vs. Lianhe Chemical Technology | Elite Color vs. MayAir Technology Co |
| Guangdong Tianhe vs. Zijin Mining Group | Guangdong Tianhe vs. Wanhua Chemical Group | Guangdong Tianhe vs. Baoshan Iron Steel | Guangdong Tianhe vs. Shandong Gold Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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