Correlation Between Guangdong Tianhe and Shanghai Zhangjiang
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By analyzing existing cross correlation between Guangdong Tianhe Agricultural and Shanghai Zhangjiang Hi Tech, you can compare the effects of market volatilities on Guangdong Tianhe and Shanghai Zhangjiang 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 Guangdong Tianhe with a short position of Shanghai Zhangjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Tianhe and Shanghai Zhangjiang.
Diversification Opportunities for Guangdong Tianhe and Shanghai Zhangjiang
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Shanghai is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Tianhe Agricultural and Shanghai Zhangjiang Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Zhangjiang and Guangdong Tianhe 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 Guangdong Tianhe Agricultural are associated (or correlated) with Shanghai Zhangjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Zhangjiang has no effect on the direction of Guangdong Tianhe i.e., Guangdong Tianhe and Shanghai Zhangjiang go up and down completely randomly.
Pair Corralation between Guangdong Tianhe and Shanghai Zhangjiang
Assuming the 90 days trading horizon Guangdong Tianhe Agricultural is expected to generate 1.34 times more return on investment than Shanghai Zhangjiang. However, Guangdong Tianhe is 1.34 times more volatile than Shanghai Zhangjiang Hi Tech. It trades about 0.03 of its potential returns per unit of risk. Shanghai Zhangjiang Hi Tech is currently generating about -0.16 per unit of risk. If you would invest 596.00 in Guangdong Tianhe Agricultural on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Guangdong Tianhe Agricultural or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Tianhe Agricultural vs. Shanghai Zhangjiang Hi Tech
Performance |
| Timeline |
| Guangdong Tianhe Agr |
| Shanghai Zhangjiang |
Guangdong Tianhe and Shanghai Zhangjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Tianhe and Shanghai Zhangjiang
The main advantage of trading using opposite Guangdong Tianhe and Shanghai Zhangjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Tianhe position performs unexpectedly, Shanghai Zhangjiang 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 Shanghai Zhangjiang will offset losses from the drop in Shanghai Zhangjiang's long position.| Guangdong Tianhe vs. Sinomach Automobile Co | Guangdong Tianhe vs. Duzhe Publishing Media | Guangdong Tianhe vs. Guangzhou Seagull Kitchen | Guangdong Tianhe vs. Shuhua Sports Co |
| Shanghai Zhangjiang vs. Jiajia Food Group | Shanghai Zhangjiang vs. Shanghai Ziyan Foods | Shanghai Zhangjiang vs. Shaanxi Meineng Clean | Shanghai Zhangjiang vs. Yankershop Food 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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