Correlation Between Guangdong Tianhe and Beijing Kingsoft
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By analyzing existing cross correlation between Guangdong Tianhe Agricultural and Beijing Kingsoft Office, you can compare the effects of market volatilities on Guangdong Tianhe and Beijing Kingsoft 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 Beijing Kingsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Tianhe and Beijing Kingsoft.
Diversification Opportunities for Guangdong Tianhe and Beijing Kingsoft
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Beijing is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Tianhe Agricultural and Beijing Kingsoft Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Kingsoft Office 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 Beijing Kingsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Kingsoft Office has no effect on the direction of Guangdong Tianhe i.e., Guangdong Tianhe and Beijing Kingsoft go up and down completely randomly.
Pair Corralation between Guangdong Tianhe and Beijing Kingsoft
Assuming the 90 days trading horizon Guangdong Tianhe Agricultural is expected to under-perform the Beijing Kingsoft. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Tianhe Agricultural is 1.36 times less risky than Beijing Kingsoft. The stock trades about -0.01 of its potential returns per unit of risk. The Beijing Kingsoft Office is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 42,231 in Beijing Kingsoft Office on October 29, 2024 and sell it today you would lose (11,728) from holding Beijing Kingsoft Office or give up 27.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Tianhe Agricultural vs. Beijing Kingsoft Office
Performance |
| Timeline |
| Guangdong Tianhe Agr |
| Beijing Kingsoft Office |
Guangdong Tianhe and Beijing Kingsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Tianhe and Beijing Kingsoft
The main advantage of trading using opposite Guangdong Tianhe and Beijing Kingsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Tianhe position performs unexpectedly, Beijing Kingsoft 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 Beijing Kingsoft will offset losses from the drop in Beijing Kingsoft's long position.| Guangdong Tianhe vs. Montage Technology Co | Guangdong Tianhe vs. Baoshan Iron Steel | Guangdong Tianhe vs. Fujian Nanwang Environment | Guangdong Tianhe vs. Bangyan Technology Co |
| Beijing Kingsoft vs. Shantui Construction Machinery | Beijing Kingsoft vs. Anhui Huilong Agricultural | Beijing Kingsoft vs. Qumei Furniture Group | Beijing Kingsoft vs. Nanxing Furniture Machinery |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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