Correlation Between Guangdong Tianhe and New China
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By analyzing existing cross correlation between Guangdong Tianhe Agricultural and New China Life, you can compare the effects of market volatilities on Guangdong Tianhe and New China 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 New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Tianhe and New China.
Diversification Opportunities for Guangdong Tianhe and New China
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guangdong and New is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Tianhe Agricultural and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life 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 New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Guangdong Tianhe i.e., Guangdong Tianhe and New China go up and down completely randomly.
Pair Corralation between Guangdong Tianhe and New China
Assuming the 90 days trading horizon Guangdong Tianhe Agricultural is expected to under-perform the New China. In addition to that, Guangdong Tianhe is 1.1 times more volatile than New China Life. It trades about -0.02 of its total potential returns per unit of risk. New China Life is currently generating about 0.05 per unit of volatility. If you would invest 2,932 in New China Life on October 30, 2024 and sell it today you would earn a total of 1,831 from holding New China Life or generate 62.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Guangdong Tianhe Agricultural vs. New China Life
Performance |
| Timeline |
| Guangdong Tianhe Agr |
| New China Life |
Guangdong Tianhe and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Tianhe and New China
The main advantage of trading using opposite Guangdong Tianhe and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Tianhe position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| Guangdong Tianhe vs. Longjian Road Bridge | Guangdong Tianhe vs. Sichuan Fulin Transportation | Guangdong Tianhe vs. Innovative Medical Management | Guangdong Tianhe vs. Shaanxi Broadcast TV |
| New China vs. Citic Offshore Helicopter | New China vs. Northern United Publishing | New China vs. Tibet Huayu Mining | New China vs. Xinjiang Baodi 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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