Correlation Between Guangdong Tengen and Senci Electric
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By analyzing existing cross correlation between Guangdong Tengen Industrial and Senci Electric Machinery, you can compare the effects of market volatilities on Guangdong Tengen and Senci Electric 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 Tengen with a short position of Senci Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Tengen and Senci Electric.
Diversification Opportunities for Guangdong Tengen and Senci Electric
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Senci is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Tengen Industrial and Senci Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senci Electric Machinery and Guangdong Tengen 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 Tengen Industrial are associated (or correlated) with Senci Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senci Electric Machinery has no effect on the direction of Guangdong Tengen i.e., Guangdong Tengen and Senci Electric go up and down completely randomly.
Pair Corralation between Guangdong Tengen and Senci Electric
Assuming the 90 days trading horizon Guangdong Tengen is expected to generate 2.54 times less return on investment than Senci Electric. But when comparing it to its historical volatility, Guangdong Tengen Industrial is 1.01 times less risky than Senci Electric. It trades about 0.01 of its potential returns per unit of risk. Senci Electric Machinery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,616 in Senci Electric Machinery on September 12, 2024 and sell it today you would earn a total of 18.00 from holding Senci Electric Machinery or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Tengen Industrial vs. Senci Electric Machinery
Performance |
| Timeline |
| Guangdong Tengen Ind |
| Senci Electric Machinery |
Guangdong Tengen and Senci Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Tengen and Senci Electric
The main advantage of trading using opposite Guangdong Tengen and Senci Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Tengen position performs unexpectedly, Senci Electric 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 Senci Electric will offset losses from the drop in Senci Electric's long position.| Guangdong Tengen vs. Chongqing Shunbo Aluminum | Guangdong Tengen vs. Aluminum Corp of | Guangdong Tengen vs. Guangdong Jingyi Metal | Guangdong Tengen vs. Hefei Metalforming Mach |
| Senci Electric vs. Agricultural Bank of | Senci Electric vs. Industrial and Commercial | Senci Electric vs. Bank of China | Senci Electric vs. PetroChina Co Ltd |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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